2001 Legislation
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HOUSE BILL NO. 35 – Insurance producer, license

HOUSE BILL NO. 35

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H0035aa,aaS..................................................by MR. SPEAKER
                   Requested by: Department of Insurance
INSURANCE PRODUCER LICENSES - Repeals, amends and adds to existing law to
provide for licensure for insurance producers; to provide a public records
exemption for records furnished to the Department of Insurance regarding
termination of appointment, employment, contract or other insurance
business relationship between an insurer and a producer; to provide for
purpose and scope; to provide definitions; to require licensure and to
provide exceptions; to provide for application for examinations; to provide
for producer licenses and nonresident producer licenses; to provide for
service of process for nonresident producers; to provide for issuance of
and refusal to issue licenses; to provide for exemption from examination;
to provide for continuation and expiration of licenses; to provide for
continuing education; to provide for notification of use of assumed names;
to provide for temporary licenses; to provide for administrative penalties,
suspensions, revocations and refusals of licenses; to provide for
commissions and appointments; to provide notification to director of
termination; to provide for reciprocity; to provide for reporting of
actions; to provide that insurers must accept business through licensed
producers; to provide for countersignature of policies; to provide for
power of attorney; to provide for reporting and accounting for premiums; to
provide that the director of the department may promulgate rules; to
provide for procedures following suspension, revocation or refusal to
continue a license; to provide for reinstatement and return of licenses; to
provide for inactive status; and to provide that service corporations may
file appointment of agents or representatives.
                                                                        
01/08    House intro - 1st rdg - to printing
    Rpt prt - to Bus
02/22    Rpt out - to Gen Ord
02/28    Rpt out amen - to engros
03/01    Rpt engros - 1st rdg - to 2nd rdg as amen
03/02    2nd rdg - to 3rd rdg as amen
03/05    3rd rdg as amen - PASSED - 65-2-3
      AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
      Bradford, Bruneel, Callister, Campbell, Chase, Clark, Collins, Crow,
      Cuddy, Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13),
      Field(20), Gagner, Gould, Hadley, Hammond, Harwood, Henbest,
      Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz, Lake, Langford,
      Loertscher, Mader, Marley, Meyer, Montgomery, Mortensen, Moss, Moyle,
      Pearce, Pischner, Pomeroy, Ridinger, Roberts, Robison, Sali, Sellman,
      Shepherd, Smith, Smylie, Stevenson, Stone, Swan, Tilman, Trail, Wood,
      Young, Mr. Speaker
      NAYS -- McKague, Schaefer
      Absent and excused -- Higgins, Raybould, Wheeler
    Floor Sponsor -- Deal
    Title apvd - to Senate
03/06    Senate intro - 1st rdg - to Com/HuRes
03/12    Rpt out - to 14th Ord
03/15    Rpt out amen - to 1st rdg as amen
03/16    1st rdg - 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, Branch, Boatright, 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 -- Ipsen
    Title apvd - to House
03/21    House concurred in Senate amens - to engros
03/22    1st rdg - to 2nd rdg as amen
03/23    2nd rdg - to 3rd rdg as amen
03/28    3rd rdg as amen - PASSED - 64-1-5
      AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
      Bradford, Callister, Campbell, Chase, Clark, Collins, Crow, Cuddy,
      Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20),
      Gagner, Gould, Hadley, Hammond, Hansen, Harwood, Henbest(Farley),
      Higgins, Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz, Lake,
      Langford, Mader, Meyer, Montgomery, Mortensen, Moss, Moyle, Pearce,
      Pischner, Pomeroy, Raybould, Ridinger, Roberts, Robison, Sali,
      Schaefer, Sellman, Shepherd, Smylie, Stone, Tilman, Trail, Wheeler,
      Wood, Young(Young), Mr. Speaker
      NAYS -- McKague
      Absent and excused -- Bruneel, Loertscher, Marley, Smith, Stevenson
    Floor Sponsor -- Deal
    Title apvd - to enrol
03/29    Rpt enrol - Sp signed - Pres signed
03/30    To Governor
04/02    Governor signed
         Session Law Chapter 296
         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. 35
                                                                        
                                       BY MR. SPEAKER
                           Requested by: Department of Insurance
                                                                        
  1                                        AN ACT
  2    RELATING TO INSURANCE PRODUCER AND INSURANCE  CONSULTANT  LICENSING;  AMENDING
  3        SECTION  9-340B,  IDAHO  CODE,  TO  CREATE  A PUBLIC RECORDS EXEMPTION FOR
  4        RECORDS FURNISHED TO THE DEPARTMENT OF INSURANCE REGARDING TERMINATION  OF
  5        AN APPOINTMENT, EMPLOYMENT, CONTRACT OR OTHER INSURANCE BUSINESS RELATION-
  6        SHIP  BETWEEN  AN  INSURER AND A PRODUCER; REPEALING CHAPTER 10, TITLE 41,
  7        IDAHO CODE; AMENDING TITLE 41, IDAHO CODE, BY THE ADDITION OF A NEW  CHAP-
  8        TER 10, TITLE 41, IDAHO CODE, TO PROVIDE FOR PURPOSE AND SCOPE, TO PROVIDE
  9        FOR  MEANING OF TERMS, TO PROVIDE FOR DEFINITIONS, TO PROVIDE FOR REQUIRE-
 10        MENT OF LICENSES, TO PROVIDE FOR EXCEPTIONS TO LICENSING, TO  PROVIDE  FOR
 11        APPLICATIONS  FOR  EXAMINATIONS,  TO PROVIDE FOR APPLICATIONS FOR PRODUCER
 12        LICENSES, TO PROVIDE FOR PRODUCER LICENSES,  TO  PROVIDE  FOR  NONRESIDENT
 13        PRODUCER  LICENSES, TO PROVIDE FOR SERVICE OF PROCESS FOR NONRESIDENT PRO-
 14        DUCERS AND CONSULTANTS, TO PROVIDE FOR ISSUANCE OF AND  REFUSAL  TO  ISSUE
 15        LICENSES,  TO  PROVIDE FOR EXEMPTION FROM EXAMINATION, TO PROVIDE FOR CON-
 16        TINUATION AND EXPIRATION OF LICENSES AND FOR CONTINUING EDUCATION, TO PRO-
 17        VIDE FOR NOTIFICATION OF USE OF ASSUMED NAMES, TO  PROVIDE  FOR  TEMPORARY
 18        LICENSING,   TO   PROVIDE   FOR   ADMINISTRATIVE  PENALTIES,  SUSPENSIONS,
 19        REVOCATIONS AND REFUSALS OF LICENSES, TO PROVIDE FOR COMMISSIONS, TO  PRO-
 20        VIDE FOR APPOINTMENTS, TO PROVIDE FOR NOTIFICATION TO DIRECTOR OF TERMINA-
 21        TION,  TO PROVIDE FOR RECIPROCITY, TO PROVIDE FOR REPORTING OF ACTIONS, TO
 22        PROVIDE THAT INSURERS MUST  ACCEPT  BUSINESS  THROUGH  LICENSED  PRODUCERS
 23        ONLY,  TO  PROVIDE  FOR  COUNTERSIGNATURE  OF POLICIES AND FOR GRANTING OF
 24        POWER OF ATTORNEY, TO PROVIDE FOR REPORTING AND ACCOUNTING  FOR  PREMIUMS,
 25        TO  PROVIDE FOR REQUIREMENT OF CONSULTANT LICENSING, TO PROVIDE FOR EXEMP-
 26        TIONS TO CONSULTANT LICENSING, TO PROVIDE QUALIFICATIONS FOR RESIDENT CON-
 27        SULTANT LICENSES, TO PROVIDE FOR NONRESIDENT CONSULTANT LICENSES, TO  PRO-
 28        VIDE  FOR  CLASSES OF INSURANCE FOR CONSULTANTS, TO PROVIDE FOR DISCLOSURE
 29        BY CONSULTANTS, TO PROVIDE FOR ERRORS AND OMISSIONS INSURANCE, TO  PROVIDE
 30        THAT THE DIRECTOR MAY PROMULGATE RULES, TO PROVIDE FOR PROCEDURE FOLLOWING
 31        SUSPENSION, REVOCATION OR REFUSAL TO CONTINUE A LICENSE AND FOR REINSTATE-
 32        MENT,  TO  PROVIDE  FOR RETURN OF LICENSES, TO PROVIDE FOR INACTIVE STATUS
 33        AND TO PROVIDE THAT THE PROVISIONS OF THE CHAPTER ARE SEVERABLE;  AMENDING
 34        SECTION  41-1108, IDAHO CODE, TO PROVIDE CORRECT REFERENCES AND CODE CITA-
 35        TIONS; AMENDING SECTION 41-1223, IDAHO CODE, TO PROVIDE CORRECT  TERMINOL-
 36        OGY;  AMENDING  SECTION  41-1315A,  IDAHO CODE, TO DELETE A REFERENCE TO A
 37        CODE CITATION AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 41-3435,
 38        IDAHO CODE, TO PROVIDE CORRECT TERMINOLOGY, TO PROVIDE THAT SERVICE CORPO-
 39        RATIONS MAY FILE APPOINTMENT OF AGENTS OR REPRESENTATIVES,  TO  PROVIDE  A
 40        CORRECT  CODE CITATION AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION
 41        41-4703, IDAHO CODE, TO REVISE A DEFINITION AND TO MAKE TECHNICAL  CORREC-
 42        TIONS; AMENDING SECTION 41-4933, IDAHO CODE, TO PROVIDE CORRECT CODE CITA-
 43        TIONS; AMENDING SECTION 41-5203, IDAHO CODE, TO REVISE A DEFINITION AND TO
 44        MAKE  TECHNICAL  CORRECTIONS; AND AMENDING SECTION 41-5501, IDAHO CODE, TO
 45        REVISE A DEFINITION AND TO MAKE A TECHNICAL CORRECTION.
                                                                        
                                           2
                                                                        
  1    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  2        SECTION 1.  That Section 9-340B, Idaho Code, be, and the  same  is  hereby
  3    amended to read as follows:
                                                                        
  4        9-340B.  RECORDS EXEMPT FROM DISCLOSURE -- LAW ENFORCEMENT RECORDS, INVES-
  5    TIGATORY RECORDS OF AGENCIES, WORKER'S COMPENSATION. The following records are
  6    exempt from disclosure:
  7        (1)  Investigatory records of a law enforcement agency, as defined in sec-
  8    tion  9-337(6),  Idaho  Code, under the conditions set forth in section 9-335,
  9    Idaho Code.
 10        (2)  Juvenile records of a person maintained pursuant to chapter 5,  title
 11    20, Idaho Code, except that facts contained in such records shall be furnished
 12    upon  request  in a manner determined by the court to persons and governmental
 13    and private agencies and institutions conducting pertinent research studies or
 14    having a legitimate interest in the protection, welfare and treatment  of  the
 15    juvenile  who  is  thirteen  (13)  years of age or younger. If the juvenile is
 16    petitioned or charged with  an offense which would be a  criminal  offense  if
 17    committed  by an adult, the name, offense of which the juvenile was petitioned
 18    or charged and disposition of the court shall be subject to disclosure as pro-
 19    vided in section 20-525, Idaho Code.  Additionally,  facts  contained  in  any
 20    records  of a juvenile maintained under chapter 5, title 20, Idaho Code, shall
 21    be furnished upon request  to  any  school  district  where  the  juvenile  is
 22    enrolled or is seeking enrollment.
 23        (3)  (a) Until  July  1,  2001, records of the department of correction to
 24        the extent that disclosure thereof would interfere  with  the  secure  and
 25        orderly  conduct  of their operations, or the rehabilitation of any person
 26        in the custody of the department of  correction,  or  would  substantially
 27        prejudice  or  prevent the carrying out of the functions of the department
 28        of correction if the public interest in confidentiality clearly  outweighs
 29        the  public  interest  in disclosure. Records exempt from disclosure shall
 30        include, but not be limited to, those containing the names  and  addresses
 31        of  witnesses  or victims or those containing information identifying vic-
 32        tims or witnesses.
 33        (b)  Operation and security manuals, plans or codes of  county  jails  and
 34        buildings  owned  or leased by Idaho state government, a county or a city.
 35        "Operation manuals" are those internal documents of any  state  government
 36        agency,  county  or  city building or jail that define the procedures uti-
 37        lized to maintain security within the building or jail. "Plans  or  codes"
 38        relate  only to those documents, the release of which could jeopardize the
 39        safety of workers in those  buildings,  or  adversely  affect  the  public
 40        safety.
 41        (c)  Records  of the commission of pardons and parole shall be exempt from
 42        public disclosure pursuant to section 20-213A,  Idaho  Code,  and  section
 43        20-223,  Idaho  Code.  Records  exempt  from disclosure shall also include
 44        those containing the names, addresses and written statements of victims.
 45        (4)  Voting records of the sexual offender classification board. In accor-
 46    dance with section 18-8315, Idaho Code, the written  record  of  the  vote  to
 47    classify an offender as a violent sexual predator by each board member in each
 48    case reviewed by that board member shall be exempt from disclosure to the pub-
 49    lic  and shall be made available upon request only to the governor, the chair-
 50    man of the senate judiciary and rules committee, and the chairman of the house
 51    of representatives judiciary, rules and administration committee, for all law-
 52    ful purposes.
 53        (5)  Records of the sheriff or Idaho state police received  or  maintained
                                                                        
                                           3
                                                                        
  1    pursuant to section 18-3302, Idaho Code, relating to an applicant or licensee.
  2        (6)  Records  of  investigations  prepared by the department of health and
  3    welfare pursuant to its statutory responsibilities dealing with the protection
  4    of children, the rehabilitation of youth, adoptions and the commitment of men-
  5    tally ill persons.
  6        (7)  Records including, but not limited to, investigative reports, result-
  7    ing from investigations conducted into complaints of  discrimination  made  to
  8    the  Idaho  human  rights  commission  unless  the public interest in allowing
  9    inspection and copying of such records outweighs the legitimate public or pri-
 10    vate interest in maintaining confidentiality of such  records.  A  person  may
 11    inspect  and copy documents from an investigative file to which he or she is a
 12    named party if such documents are not otherwise prohibited from disclosure  by
 13    federal law or regulation or state law. The confidentiality of this subsection
 14    will  no longer apply to any record used in any judicial proceeding brought by
 15    a named party to the complaint or investigation, or by the Idaho human  rights
 16    commission, relating to the complaint of discrimination.
 17        (8)  Records  containing  information obtained by the manager of the Idaho
 18    state insurance fund pursuant to chapter 9, title 72, Idaho Code, from  or  on
 19    behalf of employers or employees contained in underwriting and claims for ben-
 20    efits files.
 21        (9)  The  worker's compensation records of the Idaho industrial commission
 22    provided that the industrial commission shall make such records available:
 23        (a)  To the parties in any worker's compensation claim and to  the  indus-
 24        trial special indemnity fund of the state of Idaho; or
 25        (b)  To  employers  and prospective employers subject to the provisions of
 26        the Americans with disabilities act, 42 U.S.C. 12112, or  other  statutory
 27        limitations,  who  certify  that  the  information is being requested with
 28        respect to a worker to whom the employer has extended an offer of  employ-
 29        ment  and  will be used in accordance with the provisions of the Americans
 30        with disabilities act, 42 U.S.C. 12112, or other statutory limitations; or
 31        (c)  To employers and prospective employers not subject to the  provisions
 32        of  the  Americans with disabilities act, 42 U.S.C. 12112, or other statu-
 33        tory limitations, provided the employer presents a  written  authorization
 34        from the person to whom the records pertain; or
 35        (d)  To  others  who  demonstrate  that  the  public  interest in allowing
 36        inspection and copying of such records outweighs  the  public  or  private
 37        interest in maintaining the confidentiality of such records, as determined
 38        by a civil court of competent jurisdiction.
 39        (10) Records of investigations compiled by the commission on aging involv-
 40    ing  vulnerable  adults, as defined in section 18-1505, Idaho Code, alleged to
 41    be abused, neglected or exploited.
 42        (11) Criminal history records and  fingerprints,  as  defined  by  section
 43    67-3001,  Idaho  Code,  and  compiled  by the Idaho state police. Such records
 44    shall be released  only in accordance with chapter 30, title 67, Idaho Code.
 45        (12) Records furnished or obtained  pursuant  to  section  41-1019,  Idaho
 46    Code,  regarding  termination of an appointment, employment, contract or other
 47    insurance business relationship between an insurer and a producer.
                                                                        
 48        SECTION 2.  That Chapter 10, Title 41, Idaho Code, be,  and  the  same  is
 49    hereby repealed.
                                                                        
                                           4
                                                                        
  1        SECTION  3.  That Title 41, Idaho Code, be, and the same is hereby amended
  2    by the addition thereto of a NEW CHAPTER, to be known and designated as  Chap-
  3    ter 10, Title 41, Idaho Code, and to read as follows:
                                                                        
  4                                      CHAPTER 10
  5                          PRODUCER AND CONSULTANT LICENSING
                                                                        
  6        41-1001.  PURPOSE  AND  SCOPE. (1) This chapter governs the qualifications
  7    and procedures for the licensing of insurance  producers.  It  simplifies  and
  8    organizes  statutory  language  to  improve efficiency, permits the use of new
  9    technology and reduces costs associated with issuing  and  renewing  insurance
 10    licenses.
 11        (2)  This  chapter  applies to adjusters to the extent provided in section
 12    41-1108, Idaho Code, and to surplus lines brokers to the  extent  provided  in
 13    sections 41-1223 and 41-1224, Idaho Code. Except where expressly made applica-
 14    ble,  this  chapter  does not apply to title insurance under chapter 27, title
 15    41, Idaho Code.
                                                                        
 16        41-1002.  TERMS CONSTRUED. Wherever the terms "agent" or  "broker"  appear
 17    in  title  41,  Idaho  Code,  or in the rules of the department, they shall be
 18    understood and construed to mean "producer" as defined in section  41-1003(9),
 19    Idaho  Code, except as used in section 41-1018, Idaho Code, and any other sec-
 20    tions where it is apparent from the language that the terms should not  be  so
 21    construed.
                                                                        
 22        41-1003.  DEFINITIONS. (1) "Business entity" means a corporation, associa-
 23    tion, partnership, limited liability company, limited liability partnership or
 24    other legal entity.
 25        (2)  "Consultant" means a person required to be licensed under the laws of
 26    this  state to advise, offer to advise, counsel or provide information or ser-
 27    vice to another regarding existing or prospective insurance  for  compensation
 28    other than from the insurer.
 29        (3)  "Home  state"  means the District of Columbia and any state or terri-
 30    tory of the United States or any province of Canada in which an insurance pro-
 31    ducer maintains his or her principal place of residence or principal place  of
 32    business and is licensed to act as an insurance producer.
 33        (4)  "License"  means a document issued by the director authorizing a per-
 34    son to act as an insurance producer for the lines of  authority  specified  in
 35    the document. The license itself does not create any authority, actual, appar-
 36    ent or inherent, in the holder to represent or commit an insurance carrier.
 37        (5)  "Limited  lines insurance" is insurance which restricts the authority
 38    of the license to less than the total authority prescribed in  the  associated
 39    major  lines  pursuant  to  section 41-1008(1)(a) through (g), Idaho Code, and
 40    shall include, but not be limited to: credit life, credit  disability,  credit
 41    property,  credit unemployment, involuntary unemployment, mortgage life, mort-
 42    gage guaranty, mortgage disability,  guaranteed  automobile  protection  (GAP)
 43    insurance,  transportation  baggage  insurance, transportation ticket policies
 44    covering personal accident insurance, pet insurance,  or  any  other  line  of
 45    insurance  that  the director deems necessary to recognize for the purposes of
 46    complying with section 41-1009(5), Idaho Code.
 47        (6)  "Limited lines producer" means a producer authorized by the  director
 48    to sell, solicit or negotiate limited lines insurance.
 49        (7)  "Negotiate"  means  the  act  of conferring directly with or offering
 50    advice directly to a purchaser or prospective purchaser of a  particular  con-
 51    tract of insurance concerning any of the substantive benefits, terms or condi-
                                                                        
                                           5
                                                                        
  1    tions  of  the  contract,  provided  that the person engaged in the act either
  2    sells insurance or obtains insurance from insurers for purchasers.
  3        (8)  "Person" means an individual or a business entity.
  4        (9)  "Producer" means a person required to be licensed under the  laws  of
  5    this state to sell, solicit or negotiate insurance.
  6        (10) "Resident" means a person whose home state is Idaho or any other par-
  7    ticular state identified in conjunction with the use of the term.
  8        (11) "Sell"  means  to  exchange a contract of insurance by any means, for
  9    money or its equivalent, on behalf of an insurance company.
 10        (12) "Solicit" means attempting to sell insurance or asking  or  urging  a
 11    person  to  apply for a particular kind of insurance from a particular company
 12    or companies.
 13        (13) "Terminate" means the cancellation of  the  relationship  between  an
 14    insurance  producer and the insurer or the termination of a producer's author-
 15    ity to transact insurance for or on behalf of an insurer.
 16        (14) "Uniform application" means the current version of the national asso-
 17    ciation of insurance commissioners (NAIC) uniform application for resident and
 18    nonresident producer licensing.
 19        (15) "Uniform business entity application" means the  current  version  of
 20    the  NAIC  uniform  business  entity  application for resident and nonresident
 21    business entities.
                                                                        
 22        41-1004.  LICENSE REQUIRED. A person shall not sell, solicit or  negotiate
 23    insurance  in this state for any class or classes of insurance unless the per-
 24    son is licensed as a producer for that line of authority  in  accordance  with
 25    this chapter.
                                                                        
 26        41-1005.  EXCEPTIONS  TO  LICENSING.  (1) Nothing in this chapter shall be
 27    construed to require an insurer to obtain an insurance  producer  license.  In
 28    this  section,  the  term  "insurer"  does  not include an insurer's officers,
 29    directors, employees, subsidiaries or affiliates.
 30        (2)  A license as an insurance producer shall not be required of the  fol-
 31    lowing:
 32        (a)  An  officer,  director  or  employee of an insurer or of an insurance
 33        producer, provided that the officer, director or employee does not receive
 34        any commission on policies written  or  sold  to  insure  risks  residing,
 35        located or to be performed in this state and:
 36             (i)   The  activities of the officer, director or employee are execu-
 37             tive, administrative, managerial, clerical or a combination of these,
 38             and are only indirectly related to the sale, solicitation or negotia-
 39             tion of insurance; or
 40             (ii)  The function of the officer, director or  employee  relates  to
 41             underwriting,  loss control, inspection or the processing, adjusting,
 42             investigating or settling of a claim on a contract of insurance; or
 43             (iii) The officer, director or employee is acting in the capacity  of
 44             a  special  agent  or agency supervisor assisting insurance producers
 45             where the person's activities  are  limited  to  providing  technical
 46             advice  and  assistance  to  licensed  insurance producers and do not
 47             include the sale, solicitation or negotiation of insurance;
 48        (b)  A person who secures and furnishes information  for  the  purpose  of
 49        group  life  insurance, group property and casualty insurance, group annu-
 50        ities, group or blanket accident and health insurance, or for the  purpose
 51        of  enrolling individuals under plans, issuing certificates under plans or
 52        otherwise assisting in administering  plans,  or  performs  administrative
 53        services  relating  to  mass-marketed property and casualty insurance, and
                                                                        
                                           6
                                                                        
  1        who does not receive a commission;
  2        (c)  An employer or association or its officers, directors,  employees  or
  3        the  trustees  of an employee trust plan, to the extent that the employer,
  4        association, officer, employee, director or  trustee  is  engaged  in  the
  5        administration  or  operation  of  a  program of employee benefits for the
  6        employer's or association's own employees or the employees of its  subsid-
  7        iaries  or  affiliates,  which  involves the use of insurance issued by an
  8        insurer, as long as the employer, association, officer, director, employee
  9        or trustee is not in any manner compensated, directly  or  indirectly,  by
 10        the company issuing the contracts;
 11        (d)  Employees  of  insurers or organizations employed by insurers who are
 12        engaging in the inspection, rating or classification of risks, or  in  the
 13        supervision  of the training of insurance producers, and who are not indi-
 14        vidually engaged in the sale, solicitation or  negotiation  of  insurance,
 15        and who do not receive a commission;
 16        (e)  A  person  whose  activities in this state are limited to advertising
 17        without  the intent to solicit insurance in this state through  communica-
 18        tions  in  printed  publications  or  other forms of electronic mass media
 19        whose distribution is not limited to residents of the state, provided that
 20        the person does not sell, solicit or negotiate insurance that would insure
 21        risks residing, located or to be performed in this state;
 22        (f)  A person who is not a resident of this state who sells,  solicits  or
 23        negotiates  a  contract  of insurance for commercial property and casualty
 24        risks to an insured with risks located in more than one (1) state  insured
 25        under  that contract, provided that the person is otherwise licensed as an
 26        insurance producer to sell, solicit or negotiate  that  insurance  in  the
 27        state  where the insured maintains its principal place of business and the
 28        contract of insurance insures risks located in that state;
 29        (g)  A salaried full-time employee who counsels  or  advises  his  or  her
 30        employer  relative  to  the  insurance interests of the employer or of the
 31        subsidiaries or business affiliates of the  employer,  provided  that  the
 32        employee does not sell or solicit insurance or receive a commission; or
 33        (h)  A person who, concurrent with the rental of a motor vehicle, provides
 34        contract  options to the standard rental agreement which provides auto and
 35        travel related coverages  through  authorized  insurers  during  a  rental
 36        period not to exceed ninety (90) days.
                                                                        
 37        41-1006.  APPLICATION  FOR EXAMINATION. (1) A resident individual applying
 38    for an insurance producer license or an  insurance  consultant  license  shall
 39    pass  a  written  examination  unless  exempt  pursuant to section 41-1008(4),
 40    41-1012,  41-1027(3) or 41-1028(2)(c), Idaho Code. The examination shall  test
 41    the  knowledge  of  the individual concerning the lines of authority for which
 42    application is made, the duties and responsibilities of an insurance  producer
 43    and  the insurance laws and rules of this state. Examinations required by this
 44    section shall be developed and conducted under rules prescribed by the  direc-
 45    tor of the department of insurance.
 46        (2)  Each  individual applying for an examination shall remit a nonrefund-
 47    able fee as promulgated by the director  pursuant  to  section  41-401,  Idaho
 48    Code.
 49        (3)  An individual who fails to appear for the examination as scheduled or
 50    who  fails  to pass the examination shall reapply for an examination and remit
 51    all required fees and forms before being rescheduled for another examination.
 52        (4)  Applications for licensure not received by the department within  one
 53    hundred  eighty  (180)  days  of  the successful completion of the examination
 54    shall be denied.
                                                                        
                                           7
                                                                        
  1        41-1007.  APPLICATION FOR PRODUCER LICENSE. (1) A person  applying  for  a
  2    resident  insurance producer license shall make application to the director on
  3    the uniform application and declare under penalty of  refusal,  suspension  or
  4    revocation  of  the  license  that  the statements made in the application are
  5    true, correct and complete to  the  best  of  the  applicant's  knowledge  and
  6    belief.  Before  approving  the  application, the director shall find that the
  7    applicant:
  8        (a)  Is at least eighteen (18) years of age;
  9        (b)  Has submitted the applicant's fingerprints as may be required by  the
 10        director;
 11        (c)  Has  not committed any act that is a ground for denial, suspension or
 12        revocation of the license as set forth in title 41, Idaho Code;
 13        (d)  Has paid the fees prescribed by  the  director  pursuant  to  section
 14        41-401, Idaho Code; and
 15        (e)  Has  successfully  passed the examinations for the lines of authority
 16        for which the applicant has applied.
 17        (2)  A business entity acting as an  insurance  producer  is  required  to
 18    obtain an insurance producer license. Application shall be made using the uni-
 19    form business entity application. Before approving the application, the direc-
 20    tor shall find that:
 21        (a)  The business entity has paid the fees prescribed by the director pur-
 22        suant to section 41-401, Idaho Code; and
 23        (b)  The  business  entity  has  designated a licensed producer, who is an
 24        individual responsible for  the  business  entity's  compliance  with  the
 25        insurance laws and rules of this state.
 26        (3)  The director may require any documents which are reasonably necessary
 27    to verify the information contained in an application.
 28        (4)  Each  insurer  that sells, solicits or negotiates any form of limited
 29    line insurance shall provide to each  individual  whose  duties  will  include
 30    selling,  soliciting  or  negotiating  limited  lines  insurance  a program of
 31    instruction that may be required to be approved by the director. If acceptable
 32    to the director, and as stated by rule, the  program  of  instruction  may  be
 33    administered in place of the examination as required in section 41-1006, Idaho
 34    Code.  In addition, such course of instruction may be administered in place of
 35    any continuing education requirements pursuant to section 41-1013, Idaho Code.
                                                                        
 36        41-1008.  PRODUCER LICENSE. (1) Unless denied licensure pursuant  to  sec-
 37    tion  41-1016,  Idaho  Code, persons who have met the requirements of sections
 38    41-1006 and 41-1007,  Idaho  Code,  shall  be  issued  an  insurance  producer
 39    license.  An insurance producer may receive qualification for a license in one
 40    (1) or more of the following lines of authority:
 41        (a)  Life insurance coverage on human lives, including benefits of  endow-
 42        ment  and  annuities,  benefits  in the event of death or dismemberment by
 43        accident, and benefits for disability income;
 44        (b)  Disability, including accident and health or sickness insurance  cov-
 45        erage  for  sickness,  bodily  injury or accidental death and benefits for
 46        disability income;
 47        (c)  Property insurance coverage for the direct or consequential  loss  or
 48        damage to property of every kind;
 49        (d)  Casualty  insurance  coverage against legal liability, including lia-
 50        bility for death, injury or disability or damage to real or personal prop-
 51        erty;
 52        (e)  Variable life and variable annuity products, meaning insurance cover-
 53        age provided under variable life insurance contracts  and  variable  annu-
 54        ities;
                                                                        
                                           8
                                                                        
  1        (f)  Personal lines, meaning property and casualty insurance coverage sold
  2        to individuals and families for primarily noncommercial purposes;
  3        (g)  Any other line of insurance permitted under state laws or rules.
  4        (2)  An  insurance  producer license shall remain in effect unless revoked
  5    or suspended as long as the renewal fee promulgated by the  director  pursuant
  6    to  section  41-401, Idaho Code, is paid and the continuing education require-
  7    ments for resident insurance producers are  met  in  accordance  with  section
  8    41-1013, Idaho Code.
  9        (3)  An  individual  insurance  producer  who allows his or her license to
 10    lapse may, within twelve (12) months from the due date  of  the  renewal  fee,
 11    reinstate  the  same  license without passing a written examination unless the
 12    licensee would otherwise be required to retest under section 41-1013(7), Idaho
 13    Code. However, a penalty in the amount of double the unpaid renewal fee  shall
 14    be required for any renewal fee received after the due date.
 15        (4)  A  licensed  insurance  producer who is unable to comply with license
 16    renewal procedures due to military service or some other  extenuating  circum-
 17    stance,  such as a long-term medical disability, may request that the director
 18    waive those procedures. The producer may also request a waiver of any examina-
 19    tion requirement or any other fine or sanction imposed for failure  to  comply
 20    with renewal procedures.
 21        (5)  The  license  shall  contain  the  licensee's name, address, personal
 22    identification number, the date of issuance, the lines of authority, the expi-
 23    ration date and any other information the director deems necessary.
 24        (6)  Licensees shall inform the director by any means  acceptable  to  the
 25    director of a change of address within thirty (30) days of the change. A busi-
 26    ness  entity  licensed  as  a  producer shall inform the director by any means
 27    acceptable to the director of any change in ownership, officers, directors  or
 28    the  designated  licensed producer responsible for compliance pursuant to sec-
 29    tion 41-1007(2)(b), Idaho Code.
 30        (7)  In order to assist in the performance of the director's  duties,  the
 31    director  may  contract  with nongovernmental entities, including the national
 32    association of insurance commissioners or its affiliates or  subsidiaries,  to
 33    perform any ministerial functions related to producer licensing, including the
 34    collection  of fees, that the director and the nongovernmental entity may deem
 35    appropriate.
                                                                        
 36        41-1009.  NONRESIDENT PRODUCER LICENSE. (1) Unless denied licensure pursu-
 37    ant to section 41-1016, Idaho Code, a nonresident applicant  shall  receive  a
 38    nonresident producer license if:
 39        (a)  The  applicant is currently licensed as a resident and in good stand-
 40        ing in his or her home state;
 41        (b)  The applicant has submitted the proper request for licensure and  has
 42        paid the fees set forth by rule pursuant to section 41-401, Idaho Code;
 43        (c)  The applicant has submitted or transmitted to the director the appli-
 44        cation for licensure that the applicant submitted to his or her home state
 45        or, in lieu of such application, a completed uniform application;
 46        (d)  The applicant has submitted the applicant's fingerprints, if required
 47        by the director, on a form as prescribed by the director; and
 48        (e)  The  applicant's  home  state awards nonresident producer licenses to
 49        residents of this state on the same basis.
 50        (2)  The director may verify the producer's licensing status  through  the
 51    producer  database maintained by the national association of insurance commis-
 52    sioners, its affiliates or subsidiaries, or by any other acceptable means.
 53        (3)  A nonresident producer who moves from one state to another state or a
 54    resident producer who moves from this state to  another  state  shall  file  a
                                                                        
                                           9
                                                                        
  1    change of address and provide certification from the new resident state within
  2    thirty  (30) days of the change of legal residence. No fee or license applica-
  3    tion shall be required for filing the change of address.
  4        (4)  Notwithstanding  any  other  provision  of  this  chapter,  a  person
  5    licensed as a surplus lines broker in his or her home state  shall  receive  a
  6    nonresident  surplus  lines  broker license pursuant to subsection (1) of this
  7    section. Except as to subsection (1) of this section, nothing in this  section
  8    otherwise amends or supersedes any provision of section 41-1223, Idaho Code.
  9        (5)  Notwithstanding  any  other  provision  of  this  chapter,  a  person
 10    licensed as a limited lines producer in his or her home state shall receive  a
 11    nonresident limited lines producer license, pursuant to subsection (1) of this
 12    section,  granting  the  same  scope of authority as granted under the license
 13    issued by the producer's home state. For the purposes of this subsection, lim-
 14    ited lines insurance  is  any  authority  granted  by  the  home  state  which
 15    restricts  the  authority of the license to less than the total authority pre-
 16    scribed in the  associated  major  lines  pursuant  to  section  41-1008(1)(a)
 17    through (g), Idaho Code.
                                                                        
 18        41-1010.  NONRESIDENT PRODUCERS AND CONSULTANTS -- SERVICE OF PROCESS. (1)
 19    Each  person  applying  to be a nonresident producer or nonresident consultant
 20    shall, on a form prescribed by the director, appoint the director as his agent
 21    for purposes of receiving service of legal process issued against the producer
 22    or consultant in this state upon causes of action arising  within  this  state
 23    out  of  transactions under the license. Service upon the director as an agent
 24    shall constitute effective legal service upon the producer or consultant.
 25        (2)  The appointment shall be irrevocable for as long as  there  could  be
 26    any cause of action against the licensee arising out of his insurance transac-
 27    tions in or with respect to this state.
 28        (3)  Duplicate  copies of such legal process against the licensee shall be
 29    served upon the director by a person competent to serve  a  summons.   At  the
 30    time  of service the plaintiff shall pay the director an appropriate fee to be
 31    determined by rule and not exceeding thirty dollars ($30.00).
 32        (4)  Upon receiving such service, the director shall send one (1) copy  of
 33    the  process  by registered or certified mail with return receipt requested to
 34    the defendant licensee at his last address of record with the director.
 35        (5)  The director shall keep a record of the day and hour of such  service
 36    upon  him. No proceedings shall be brought against the producer or consultant,
 37    and the producer or consultant shall not  be  required  to  appear,  plead  or
 38    answer until the expiration of thirty (30) days after the date of service upon
 39    the director.
                                                                        
 40        41-1011.  ISSUANCE  -- REFUSAL OF LICENSE. If after completion of applica-
 41    tion for a license, the taking and passing of any examination  required  under
 42    this  chapter  and,  if required by the director, receipt of a report from the
 43    federal bureau of investigation  based on the fingerprints of  the  applicant,
 44    the  director  finds  that  the applicant has fully met the requirements for a
 45    license, the director shall issue the license to the applicant; otherwise, the
 46    director shall refuse to issue the  license  and  shall  promptly  notify  the
 47    applicant and any appointing insurer or insurers of such refusal and state the
 48    grounds  for  the  refusal. Pending the receipt of the report from the federal
 49    bureau of investigation, the director may, in his discretion, issue  a  tempo-
 50    rary license if all other qualifications have been met.
                                                                        
 51        41-1012.  EXEMPTION FROM EXAMINATION. (1) An individual who applies for an
 52    insurance  producer license in  this state and who was previously licensed for
                                                                        
                                           10
                                                                        
  1    the same lines of authority in another state shall not be required to complete
  2    any prelicensing examination if:
  3        (a)  The person is currently licensed in another state; or
  4        (b)  The application is received within ninety (90) days of the  cancella-
  5        tion of the applicant's previous license and the prior state issues a cer-
  6        tification that:
  7             (i)   At the time of cancellation, the applicant was in good standing
  8             in that state; or
  9             (ii)  The  state's  producer  database  records, as maintained by the
 10             national association of insurance commissioners or its affiliates  or
 11             subsidiaries,  indicate  that the producer is or was licensed in good
 12             standing for the lines of authority requested.
 13        (2)  A person licensed as an insurance producer in another state who moves
 14    to this state shall make application within ninety (90) days  of  establishing
 15    legal  residence  to  become  a resident licensee pursuant to section 41-1006,
 16    Idaho Code. No examination shall be required of that person to obtain any line
 17    of authority previously held in the prior state unless the  director  provides
 18    otherwise by rule.
                                                                        
 19        41-1013.  CONTINUATION  --  EXPIRATION OF LICENSES -- CONTINUING EDUCATION
 20    STATEMENT. (1) All producer, consultant, adjuster,  and  surplus  line  broker
 21    licenses  issued  under  this code shall continue in force until expired, sus-
 22    pended, revoked or otherwise terminated, subject to payment of the  applicable
 23    continuation  fee  on  or before the expiration date referred to in subsection
 24    (2) of this section, accompanied by a written request  for  such  continuation
 25    and a continuing education statement verifying that the licensee has completed
 26    any  continuing education requirements imposed by the director. An application
 27    for renewal is not complete unless it is submitted with  both  the  applicable
 28    fee  and  the completed continuing education statement. Requests for continua-
 29    tion shall be made in writing on forms to be prescribed by the director.
 30        (2)  The director may fix the dates of expiration  for  licenses  in  such
 31    manner  as  is  deemed by him to be advisable for an efficient distribution of
 32    the workload of his office. If the expiration date for a particular license or
 33    appointment would shorten the period for which the license or appointment con-
 34    tinuation fee has been paid, no refund of an unearned fee shall  be  made.  If
 35    the expiration date for a particular license or appointment would lengthen the
 36    period  for which a license or appointment continuation fee has been paid, the
 37    director shall charge no additional fee for such lengthened period.
 38        (3)  Any license referred to in subsection (1) of this section  for  which
 39    no  request for continuation, fee and completed continuing education statement
 40    are timely received by the director shall be deemed to have  expired  at  mid-
 41    night on the applicable expiration date.
 42        (4)  All  sums tendered as fees for continuations of licenses as producer,
 43    consultant, limited lines producer, adjuster or surplus line broker  shall  be
 44    deemed  earned  when  paid and shall not be subject to refund, except that the
 45    director shall refund any duplicate payment of fees.
 46        (5)  For the protection of the people of this  state  the  director  shall
 47    establish,  by  rule, additional educational requirements designed to maintain
 48    and improve the insurance skills and knowledge of resident producers and resi-
 49    dent consultants after licensure by the department of insurance. The  director
 50    shall  also establish, by rule, an advisory committee comprised of representa-
 51    tives from each segment of the insurance industry to assist  the  director  in
 52    prescribing additional educational requirements. Such rules promulgated by the
 53    director  shall include limits on the terms of service for members of the com-
 54    mittee.
                                                                        
                                           11
                                                                        
  1        (6)  Subject to subsection (3) of this section,  the  director  shall  not
  2    permit to be continued the license of any producer who is licensed pursuant to
  3    section  41-1007,  Idaho  Code,  or any consultant who is licensed pursuant to
  4    section 41-1027, Idaho Code, who is a resident of this state, unless such per-
  5    son has demonstrated to the satisfaction of the director that in  addition  to
  6    meeting  the standards contained in sections 41-1007, (qualifications for pro-
  7    ducer license) and 41-1027 (qualifications for resident  consultant  license),
  8    Idaho  Code, as may be applicable, all the additional educational requirements
  9    as the director may prescribe by rule have been met.
 10        (7)  Failure of the licensee to comply with any applicable additional edu-
 11    cation requirements prescribed by the director by rule by the expiration  date
 12    of  the  license  shall  be grounds for the director to refuse to continue any
 13    such license. The licensee may reinstate his  or  her  license  by  submitting
 14    proof  of  all education requirements within ninety (90) days from the date of
 15    expiration of the license and by submitting an additional administrative  pen-
 16    alty  of one hundred dollars ($100) for a delinquency of one (1) day to thirty
 17    (30) days, two hundred dollars ($200) for a  delinquency  of  thirty-one  (31)
 18    days to sixty (60) days, and three hundred dollars ($300) for a delinquency of
 19    sixty-one  (61) days to ninety (90) days. Following the ninetieth day from the
 20    date of nonrenewal of the license and up to one (1) year from  the  nonrenewal
 21    date,  the  licensee  must  complete  all requirements for licensure including
 22    retesting, submission of a new application and payment of  all  new  licensing
 23    fees.  In  addition,  the  individual  must  submit proof of completion of the
 24    required education requirements for the licensing period in which the  license
 25    was  terminated.  After the license has been expired for one (1) year or more,
 26    the individual must reapply and retest as a new applicant.
                                                                        
 27        41-1014.  ASSUMED NAMES. An insurance producer doing  business  under  any
 28    name  other  than the producer's legal name is required to notify the director
 29    in writing prior to using  the assumed name.
                                                                        
 30        41-1015.  TEMPORARY LICENSING. (1) The  director  may  issue  a  temporary
 31    insurance producer license for a period not to exceed one hundred eighty (180)
 32    days without requiring an examination if the director deems that the temporary
 33    license is necessary for the servicing of an insurance business in the follow-
 34    ing cases:
 35        (a)  To the surviving spouse or court-appointed personal representative of
 36        a  licensed  insurance producer who dies or becomes mentally or physically
 37        disabled in order to allow adequate time for the  sale  of  the  insurance
 38        business  owned  by the producer or for the recovery or return of the pro-
 39        ducer to the business or to provide for the training and licensing of  new
 40        personnel to operate the producer's business;
 41        (b)  To a member or employee of a business entity licensed as an insurance
 42        producer  upon  the death or disability of an individual designated in the
 43        business entity application or the license;
 44        (c)  To the designee of a licensed insurance producer entering active ser-
 45        vice in the armed forces of the United States of America; or
 46        (d)  Pursuant to section 41-1011, Idaho Code, or in any other circumstance
 47        where the director deems the public interest will best be  served  by  the
 48        issuance of the temporary license.
 49        (2)  The director may by order limit the authority of any temporary licen-
 50    see in any way deemed necessary to protect insureds and the public. The direc-
 51    tor  may  require  the  temporary licensee to have a suitable sponsor who is a
 52    licensed producer or insurer and who assumes responsibility for all actions of
 53    the temporary licensee, and may impose other similar requirements designed  to
                                                                        
                                           12
                                                                        
  1    protect  insureds and the public. The director may by order revoke a temporary
  2    license, without the right to a prior hearing, if the interests of insureds or
  3    the public are endangered. A temporary license  may  not  continue  after  the
  4    owner or the personal representative disposes of the business.
                                                                        
  5        41-1016.  ADMINISTRATIVE  PENALTY  --  SUSPENSION,  REVOCATION, REFUSAL OF
  6    LICENSE. (1) The director may impose an administrative penalty not  to  exceed
  7    one thousand dollars ($1,000), for deposit in the general fund of the state of
  8    Idaho,  and  may suspend for not more than twelve (12) months or may revoke or
  9    refuse to issue or continue any license issued under this chapter, chapter 27,
 10    title 41, Idaho Code (title insurance),  chapter  11,  title  41,  Idaho  Code
 11    (adjusters),  or  any surplus lines broker license if, after a hearing held on
 12    not less than twenty (20) days' notice of such  hearing  and  of  the  charges
 13    against  the  licensee  given as provided in section 41-212(3), Idaho Code, to
 14    the licensee and to any appointing insurers represented (as to a producer  who
 15    is  appointed as an agent), the director finds that as to the licensee any one
 16    (1) or more of the following causes or violations exist:
 17        (a)  Providing incorrect,  misleading,  incomplete  or  materially  untrue
 18        information in the license application;
 19        (b)  Violating  any  provision  of  title 41, Idaho Code, department rule,
 20        subpoena or order of the director or of another state's  insurance  direc-
 21        tor;
 22        (c)  Obtaining or attempting to obtain a license through misrepresentation
 23        or fraud;
 24        (d)  Improperly withholding, misappropriating or converting any moneys or
 25        properties received in the course of doing insurance business;
 26        (e)  Misrepresenting the terms of an actual or proposed insurance contract
 27        or  application  for insurance or misrepresenting any fact material to any
 28        insurance transaction or proposed transaction;
 29        (f)  Being convicted of or pleading guilty to any felony, or to  a  misde-
 30        meanor  which  evidences bad moral character, dishonesty, a lack of integ-
 31        rity and financial responsibility, or an unfitness and inability  to  pro-
 32        vide acceptable service to the consuming public;
 33        (g)  Admitting or being found to have committed any insurance unfair trade
 34        practice or fraud;
 35        (h)  Using  fraudulent,  coercive or dishonest practices, or demonstrating
 36        incompetence, untrustworthiness or financial irresponsibility, or being  a
 37        source of injury and loss to the public or others, in the conduct of busi-
 38        ness in this state or elsewhere;
 39        (i)  Having an insurance license denied, suspended or revoked in any other
 40        state, province, district or territory;
 41        (j)  Forging another's name on an application for insurance or on any doc-
 42        ument related to an insurance transaction;
 43        (k)  Improperly using notes or any other reference material to complete an
 44        examination for an insurance license;
 45        (l)  Knowingly  accepting insurance business from an individual who is not
 46        licensed;
 47        (m)  Failing to comply with an administrative or court  order  imposing  a
 48        child support obligation, provided however, that nothing in this provision
 49        shall be deemed to abrogate or modify chapter 14, title 7, Idaho Code; or
 50        (n)  Failing  to pay state income tax or to comply with any administrative
 51        or court order directing payment of state income tax.
 52        (2)  The director shall, without hearing, suspend for not more than twelve
 53    (12) months, or shall revoke or refuse to continue any  license  issued  under
 54    this chapter to a nonresident where the director has received a final order of
                                                                        
                                           13
                                                                        
  1    suspension,  revocation  or  refusal to continue from the insurance regulatory
  2    official or court of jurisdiction of the licensee's home state. If cause under
  3    this provision exists after the expiration of the twelve (12) months,  succes-
  4    sive suspensions may be imposed by the director without hearing.
  5        (3)  In the event that the director denies or refuses to renew an applica-
  6    tion  for  a  license, the director shall notify the applicant or licensee and
  7    advise, in writing, the applicant or licensee of the reason for the denial  or
  8    nonrenewal of the applicant's or licensee's license. The applicant or licensee
  9    may  make  written  demand upon the director within twenty-one (21) days for a
 10    hearing before the director to determine the reasonableness of the  director's
 11    action. The hearing shall be held pursuant to chapter 2, title 41, and chapter
 12    52, title 67, Idaho Code.
 13        (4)  The license of a business entity may be suspended, revoked or refused
 14    if  the  director  finds,  after  hearing, that the violation of an individual
 15    licensee, who is registered to or acting on behalf of the business entity, was
 16    known or should have been known by one (1) or more of the owners, officers  or
 17    managers  acting  on  behalf of the business entity and that the violation was
 18    not reported to the director and no corrective action was taken.
 19        (5)  In addition to or in lieu of any  applicable  denial,  suspension  or
 20    revocation  of  a  license, a person may, after hearing, be subject to a civil
 21    fine or administrative penalty pursuant to subsection (1) of this  section  or
 22    any other applicable section.
 23        (6)  The  director shall retain the authority to enforce the provisions of
 24    and impose any penalty or remedy authorized by title 41, Idaho  Code,  against
 25    any person who is under investigation for or charged with a violation of title
 26    41,  Idaho Code, or department rule, even if the person's license or registra-
 27    tion has been surrendered, has lapsed by operation of law, or  if  the  person
 28    has never been licensed.
                                                                        
 29        41-1017.  COMMISSIONS.  (1)  An  insurance  company  or insurance producer
 30    shall not pay a commission, service fee or other valuable consideration  to  a
 31    person  for selling, soliciting or negotiating insurance in this state if that
 32    person is not duly licensed as required under this chapter.
 33        (2)  A person shall not accept a commission, service fee or other valuable
 34    consideration for selling, soliciting or negotiating insurance in  this  state
 35    if that person is not duly licensed as required under this chapter.
 36        (3)  Renewals  or  other  deferred commissions may be paid to a person for
 37    selling, soliciting or negotiating insurance in this state if that person  was
 38    duly  licensed as required under this chapter at the time of the sale, solici-
 39    tation or negotiation.
 40        (4)  An insurer or insurance producer may pay or assign commissions,  ser-
 41    vice fees or other valuable consideration to any person, regardless of whether
 42    that  person is licensed as a producer, unless the payment or assignment would
 43    violate a specific section of title 41, Idaho Code, including, but not limited
 44    to, sections 41-1314 and 41-2708, Idaho Code, or department rule.
                                                                        
 45        41-1018.  APPOINTMENTS. (1) An insurance producer  shall  not  act  as  an
 46    agent  of  an insurer unless the insurance producer becomes an appointed agent
 47    of that insurer. An insurance producer who is not acting as  an  agent  of  an
 48    insurer is not required to become appointed.
 49        (2)  To  appoint  a  producer  as  its agent, the appointing insurer shall
 50    file, in a format approved by the director, a  notice  of  appointment  within
 51    fifteen  (15)  days from the date the agency contract is executed or the first
 52    insurance application is submitted.
 53        (3)  Upon receipt of the notice of appointment, the director shall verify,
                                                                        
                                           14
                                                                        
  1    within a reasonable time not to exceed thirty (30) days,  that  the  insurance
  2    producer  is eligible for appointment. If the insurance producer is determined
  3    to be ineligible for appointment, the director shall notify the insurer within
  4    five (5) days of his determination.
                                                                        
  5        41-1019.  NOTIFICATION TO DIRECTOR  OF  TERMINATION.  (1)  An  insurer  or
  6    authorized  representative  of  the  insurer  that terminates the appointment,
  7    employment,  contract or other insurance business relationship with a producer
  8    shall notify the director within thirty (30) days following the effective date
  9    of the termination, using a format prescribed by the director, if  the  reason
 10    for  termination  is  one  of  the reasons set forth in section 41-1016, Idaho
 11    Code, or the insurer has knowledge that the producer was  found  by  a  court,
 12    governmental  body  or  self-regulatory organization authorized by law to have
 13    engaged in any of the activities set forth in  section  41-1016,  Idaho  Code.
 14    Upon the written request of the director, the insurer shall provide additional
 15    information, documents, records or other data pertaining to the termination or
 16    activity of the producer.
 17        (2)  An  insurer  or  authorized representative of the insurer that termi-
 18    nates the appointment, employment, contract or other insurance business  rela-
 19    tionship  with  a  producer  for  any reason not set forth in section 41-1016,
 20    Idaho Code, shall notify the director within thirty (30)  days  following  the
 21    effective  date of the termination, using a format prescribed by the director.
 22    Upon written request of the director, the  insurer  shall  provide  additional
 23    information, documents, records or other data pertaining to the termination.
 24        (3)  The  insurer  or  authorized  representative  of  the  insurer  shall
 25    promptly  notify  the director in a format acceptable to the director if, upon
 26    further review or investigation, the insurer discovers additional  information
 27    that  would have been reportable to the director in accordance with subsection
 28    (1) of this section.
 29        (4)  A copy of any notification shall be provided to the producer as  fol-
 30    lows:
 31        (a)  Within  fifteen  (15)  days after making the notification required by
 32        subsections (1), (2) and (3) of this section, the  insurer  shall  mail  a
 33        copy of the notification to the producer at his or her last known address.
 34        If  the  producer  is terminated for cause for any other reasons listed in
 35        section 41-1016, Idaho Code, the insurer shall provide a copy of the noti-
 36        fication to the producer at his or her last  known  address  by  certified
 37        mail,  return  receipt requested, postage prepaid or by overnight delivery
 38        using a nationally recognized carrier.
 39        (b)  Within thirty (30) days after the producer has received the  original
 40        or  additional  notification,  the producer may file written comments con-
 41        cerning the substance of the notification with the director. The  producer
 42        shall,  by  the  same means, simultaneously send a copy of the comments to
 43        the reporting insurer, and  the  comments  shall  become  a  part  of  the
 44        director's  file and shall accompany every copy of a report distributed or
 45        disclosed for any reason about the producer as permitted under  subsection
 46        (6) of this section.
 47        (5)  Immunities.
 48        (a)  In the absence of actual malice, an insurer, the authorized represen-
 49        tative  of  the  insurer,  a producer, the director, or an organization of
 50        which the director is a member and that compiles information and makes  it
 51        available  to  other  insurance directors or regulatory or law enforcement
 52        agencies, shall not be subject to civil liability, and a  civil  cause  of
 53        action  of  any  nature  shall  not  arise against these entities or their
 54        respective agents or employees as a result of any statement or information
                                                                        
                                           15
                                                                        
  1        required by or provided pursuant to this section or any information relat-
  2        ing to any statement that may be requested in writing by the director from
  3        an insurer or producer or as a result of any statement  by  a  terminating
  4        insurer  or  producer  to an insurer or producer limited solely and exclu-
  5        sively to whether a termination for cause under  subsection  (1)  of  this
  6        section  was  reported to the director, provided that the propriety of any
  7        termination for cause under subsection (1) of this section is certified in
  8        writing by an officer or authorized representative of the insurer or  pro-
  9        ducer terminating the relationship.
 10        (b)  In  any  action brought against a person that may have immunity under
 11        paragraph (a) of this subsection for making any statement required by this
 12        section or providing any information relating to any statement that may be
 13        requested by the director, the party bringing the action shall plead  spe-
 14        cifically in any allegation that paragraph (a) of this subsection does not
 15        apply because the person making the statement or providing the information
 16        did so with actual malice.
 17        (c)  Paragraph  (a) or (b) of this subsection shall not abrogate or modify
 18        any existing statutory or common law privileges or immunities.
 19        (6)  Confidentiality.
 20        (a)  Any documents, materials or other information in the control or  pos-
 21        session  of  the  department of insurance that is furnished by an insurer,
 22        producer or an employee or agent acting on behalf of the insurer  or  pro-
 23        ducer,  or  obtained  by the director in an investigation pursuant to this
 24        section, shall be confidential and privileged, shall be exempt from public
 25        disclosure under chapter 3, title 9, Idaho Code, shall not be  subject  to
 26        subpoena,  shall  not be subject to discovery, and shall not be admissible
 27        in evidence in any private civil action. However, the director  is  autho-
 28        rized to use the documents, materials or other information in the further-
 29        ance of any regulatory or legal action brought as a part of the director's
 30        duties.
 31        (b)  Neither the director nor any person who receives documents, materials
 32        or  other  information  while  acting  under the authority of the director
 33        shall be permitted or required to testify in any private civil action con-
 34        cerning any confidential documents, materials or  information  subject  to
 35        paragraph (a) of this subsection.
 36        (c)  In  order to assist in the performance of the director's duties under
 37        this chapter, the director:
 38             (i)   May share documents, materials or other information,  including
 39             confidential  and  privileged  documents and materials or information
 40             subject to paragraph (a) of this subsection, with other  state,  fed-
 41             eral  and  international  regulatory  agencies  and  law  enforcement
 42             authorities,  and  with the national association of insurance commis-
 43             sioners, its affiliates or subsidiaries, provided that the  recipient
 44             agrees  to  maintain the confidentiality and privileged status of the
 45             documents, materials or other information;
 46             (ii)  May receive  documents,  materials  or  information,  including
 47             otherwise  confidential and privileged documents, materials or infor-
 48             mation, from the national association of insurance commissioners, its
 49             affiliates or subsidiaries  and  from  regulatory  agencies  and  law
 50             enforcement  authorities  of other foreign or domestic jurisdictions,
 51             and shall maintain as confidential or privileged any documents, mate-
 52             rials or information received with notice or with  the  understanding
 53             that they are confidential or privileged under the laws of the juris-
 54             diction  that  is  the source of the documents, materials or informa-
 55             tion; and
                                                                        
                                           16
                                                                        
  1             (iii) May enter into agreements governing sharing and use of informa-
  2             tion consistent with this subsection.
  3        (d)  No waiver of any applicable privilege or claim of confidentiality  in
  4        the documents, materials or information shall occur as a result of disclo-
  5        sure  to  the  director  under  this  section or as a result of sharing as
  6        authorized in paragraph (c) of this subsection.
  7        (e)  Nothing in this chapter shall prohibit the  director  from  releasing
  8        final  adjudicated actions, including for cause terminations that are open
  9        to public inspection pursuant to chapter 3, title 9 and  title  41,  Idaho
 10        Code,  to  a  database  or  other  clearinghouse service maintained by the
 11        national association of insurance commissioners or its affiliates or  sub-
 12        sidiaries.
 13        (7)  Penalties for failing to report. An insurer, the authorized represen-
 14    tative of the insurer, or a producer who fails to report as required under the
 15    provisions  of  this section or who is found by a court of competent jurisdic-
 16    tion to have reported with actual malice may, after notice and  hearing,  have
 17    his  license or certificate of authority suspended or revoked and may be fined
 18    in accordance with section 41-1016 or 41-327, Idaho Code.
                                                                        
 19        41-1020.  RECIPROCITY. (1) The  director  shall  waive  any  requirements,
 20    except the requirements imposed by section 41-1009, Idaho Code, for a nonresi-
 21    dent  producer  license  applicant  with  a valid license from his or her home
 22    state if the applicant's home state awards nonresident licenses  to  residents
 23    of this state on the same basis.
 24        (2)  A nonresident producer's satisfaction of his or her home state's con-
 25    tinuing  education requirements for licensed insurance producers shall consti-
 26    tute satisfaction of this state's continuing  education  requirements  if  the
 27    nonresident  producer's home state recognizes the satisfaction of its continu-
 28    ing  education requirements imposed upon producers from this state on the same
 29    basis.
                                                                        
 30        41-1021.  REPORTING OF ACTIONS. (1) A producer shall report to the  direc-
 31    tor  any administrative action taken against the producer in another jurisdic-
 32    tion or by another governmental agency within thirty (30) days  of  the  final
 33    disposition of the matter. This report shall include a copy of the order, con-
 34    sent order or other relevant legal documents.
 35        (2)  Within  thirty (30) days of the initial pretrial hearing date, a pro-
 36    ducer shall report to the director any criminal prosecution  of  the  producer
 37    taken in any jurisdiction. The report shall include a copy of the initial com-
 38    plaint  filed,  the  order  resulting  from the hearing and any other relevant
 39    legal documents.
                                                                        
 40        41-1022.  INSURERS MUST ACCEPT BUSINESS THROUGH LICENSED  PRODUCERS  ONLY.
 41    (1)  No authorized insurer shall make, write, place or cause to be made, writ-
 42    ten or placed in this state any policy, duplicate policy,  or  insurance  con-
 43    tract of any kind, covering  a subject of insurance resident, located or to be
 44    performed  in this state through any person who is not then licensed as a pro-
 45    ducer under this chapter.
 46        (2)  The director may penalize,  suspend  or  revoke  the  certificate  of
 47    authority  of  any  insurer  violating this section in accordance with section
 48    41-327(1), Idaho Code.
                                                                        
 49        41-1023.  COUNTERSIGNATURE OF POLICIES -- POWER OF ATTORNEY. (1) When  the
 50    signature  or  countersignature of a property or casualty producer is required
 51    on an insurance contract, or rider or endorsement thereto, the producer shall,
                                                                        
                                           17
                                                                        
  1    except as provided in section 41-337(1), Idaho Code,  and  subsection  (2)  of
  2    this section, affix his original written signature thereon.
  3        (2)  The  property  or  casualty producer may grant a power of attorney in
  4    writing to an individual who is twenty-one (21) years of age or older,  autho-
  5    rizing  such  person to countersign or cause a facsimile of the agent's signa-
  6    ture to be placed on policies and endorsements in his name and on his  behalf.
  7    The  power  of attorney shall be acknowledged by the agent under oath before a
  8    notary public and shall be kept on file in the agent's office.
                                                                        
  9        41-1024.  REPORTING AND ACCOUNTING  FOR  PREMIUMS.  (1)  All  premiums  or
 10    return  premiums  received  by a producer shall be trust funds received by the
 11    producer in a fiduciary capacity, and the producer shall,  in  the  applicable
 12    regular  course  of  business,  account  for  and pay the same to the insured,
 13    insurer or producer entitled to the funds. If the producer establishes a sepa-
 14    rate deposit for funds belonging to others in order to avoid a commingling  of
 15    such  fiduciary funds with his own funds, he may deposit and commingle in such
 16    separate deposit all funds belonging to others so long as the amount  of  such
 17    deposit  so  held  for  all other persons is reasonably ascertainable from the
 18    records and accounts of the producer.
 19        (2)  Any producer who, not being lawfully  entitled  thereto,  diverts  or
 20    appropriates  to  his  own  use  such  trust or fiduciary funds or any portion
 21    thereof, whether or not such funds have been separately deposited, shall  upon
 22    conviction be guilty of a felony.
                                                                        
 23        41-1025.  CONSULTANT  LICENSE  REQUIRED.  (1) A person shall not engage in
 24    any of the following activities unless the person  holds  a  valid  consultant
 25    license issued by the director:
 26        (a)  Purporting  or  offering to engage in any of the activities described
 27        in paragraph (b) of this subsection by  using,  in  conjunction  with  the
 28        person's  name, the title or designation of insurance planner, consultant,
 29        adviser, counselor or any similar title or designation; or
 30        (b)  For compensation other than commission from the  sale  of  insurance,
 31        engaging, attempting to engage or offering to engage in any of the follow-
 32        ing activities:
 33             (i)   Acting as a consultant regarding insurance;
 34             (ii)  Giving  advice, counsel, opinion or service with respect to the
 35             benefits, advantages or disadvantages of insurance that may be or has
 36             been issued in this state; or
 37             (iii) In any other manner providing information about insurance.
 38        (2)  For the purposes of subsection (1)(b) of this  section,  compensation
 39    includes  consideration paid for financial and other related services provided
 40    in connection with services referred to in subsection (1)(b) of this section.
                                                                        
 41        41-1026.  EXEMPTIONS. (1) The following persons are not insurance  consul-
 42    tants  for  the  purposes  of  this  chapter,  and  the prohibition in section
 43    41-1025(1), Idaho Code, does not apply to:
 44        (a)  Any attorney rendering services in the performance of  duties  of  an
 45        attorney;
 46        (b)  Any certified public accountant rendering services in the performance
 47        of the duties of a certified public accountant, as authorized by law;
 48        (c)  Any person who, while conducting an educational seminar, performs any
 49        of the activities described in section 41-1025(1)(b), Idaho Code;
 50        (d)  Any  actuary  who  is  a  member of an organization determined by the
 51        director as establishing standards for the actuarial profession; or
 52        (e)  A person who provides or offers or purports to  provide  any  of  the
                                                                        
                                           18
                                                                        
  1        services  described  in  section  41-1025(1)(b),  Idaho Code, to agents or
  2        authorized insurers only.
                                                                        
  3        41-1027.  QUALIFICATIONS FOR RESIDENT CONSULTANT LICENSE. An applicant for
  4    a license as a resident consultant shall apply for the license on  a  form  as
  5    prescribed by the director and must meet the following requirements:
  6        (1)  The applicant must provide satisfactory evidence to the director that
  7    the  insurance  required  under section 41-1031, Idaho Code, has been procured
  8    and is in effect.
  9        (2)  The applicant, if an individual, must have  had  at  least  five  (5)
 10    years'  experience  in the insurance business relating to the class or classes
 11    of insurance for which the applicant is applying to be an insurance consultant
 12    and must have met educational qualifications as prescribed by the director  by
 13    rule.
 14        (3)  The  applicant, if an individual, must take and pass a written exami-
 15    nation given by the director. The examination requirement does not apply to an
 16    applicant who is licensed as a producer to transact the class  or  classes  of
 17    insurance for which the applicant is applying to be an insurance consultant.
 18        (4)  The  applicant must satisfy any other requirements established by the
 19    director by rule.
                                                                        
 20        41-1028.  NONRESIDENT CONSULTANT LICENSE. (1)  A  person  who  resides  in
 21    another  state  or a province of Canada and is licensed in that state or prov-
 22    ince as an insurance consultant may be licensed to act as a  nonresident  con-
 23    sultant  in this state as provided in this section if the state or province in
 24    which the person resides gives the same privilege to a resident insurance con-
 25    sultant of this state.
 26        (2)  An applicant for a license to act as a nonresident  consultant  shall
 27    apply  for  the license on a form as prescribed by the director, and must meet
 28    the following requirements:
 29        (a)  The applicant must provide satisfactory evidence to the director that
 30        the insurance required in section 41-1031, Idaho Code, has  been  procured
 31        and is in effect.
 32        (b)  The  applicant,  if  an  individual,  must have had at least five (5)
 33        years' experience in the insurance business relating to the class or clas-
 34        ses of insurance for which the applicant is applying to  be  an  insurance
 35        consultant  and  must have met educational qualifications as prescribed by
 36        the director by rule.
 37        (c)  The applicant, if an individual, must take and pass a written  exami-
 38        nation  given  by  the director, unless the state or province in which the
 39        applicant resides licenses or  registers  insurance  consultants  of  this
 40        state  without  examination.  If  the  individual  is  not  required to be
 41        licensed in his home state, the individual may meet the requirements for a
 42        consultant license in this state by taking and passing the consultant exam
 43        and by meeting the qualifications described in paragraphs (a) and  (b)  of
 44        this  subsection.  The examination requirement does not apply to an appli-
 45        cant who is licensed as a nonresident producer to transact  the  class  or
 46        classes  of  insurance for which the applicant is applying to be an insur-
 47        ance consultant.
 48        (d)  The applicant must satisfy any other requirements established by  the
 49        director by rule.
                                                                        
 50        41-1029.  CLASSES OF INSURANCE FOR CONSULTANTS. When the director issues a
 51    license  authorizing  a person to act as an insurance consultant, the director
 52    shall endorse on the license the class or classes of  insurance  described  in
                                                                        
                                           19
                                                                        
  1    this  section  with  respect  to  which  the person is authorized to act as an
  2    insurance consultant. The classes of insurance are:
  3        (1)  Life insurance;
  4        (2)  Disability insurance;
  5        (3)  Property and casualty insurance. Under this class, an insurance  con-
  6    sultant  may  also  act as a consultant with respect to marine, transportation
  7    and surety insurance; and
  8        (4)  Any class of insurance designated by the director by rule.
                                                                        
  9        41-1030.  DISCLOSURE BY CONSULTANTS. (1)  An  insurance  consultant  shall
 10    furnish  to  each client and prospective client a written disclosure statement
 11    containing the following information:
 12        (a)  A description of the nature of the work to be performed by the insur-
 13        ance consultant;
 14        (b)  The applicable occupational and educational background of the  insur-
 15        ance consultant;
 16        (c)  The  area or areas of insurance in which the insurance consultant has
 17        particular expertise;
 18        (d)  The fee schedule and any other expenses that the insurance consultant
 19        charges and whether the fees may be negotiated;
 20        (e)  The names of any persons, other than clients, that the insurance con-
 21        sultant represents;
 22        (f)  Whether the insurance  consultant  will  receive  any  commission  or
 23        obtain any other compensation for services provided to the client in addi-
 24        tion to fees and other expenses paid by the client; and
 25        (g)  Any other information required by the director by rule.
 26        (2)  An  insurance  consultant  shall  disclose information required under
 27    this subsection to each client in the course of providing insurance consultant
 28    services to the client and before the insurance  consultant  makes  any  final
 29    insurance  recommendation  to  the client. The insurance consultant shall dis-
 30    close at least the following information as applicable to the line  of  insur-
 31    ance for which the insurance consultant is providing services:
 32        (a)  Other  business  activities  of  the insurance consultant relating to
 33        financial planning;
 34        (b)  The method of investment analysis and comparison used;
 35        (c)  Assumptions contributing to insurance recommendations for the client;
 36        and
 37        (d)  Any other information required by the director by rule.
 38        (3)  The director may establish  additional  disclosure  requirements  for
 39    licensees who are licensed as both producers and consultants.
 40        (4)  The  director  may  prescribe  the form of disclosure statement to be
 41    used under subsection (1) of this section.
                                                                        
 42        41-1031.  ERRORS AND OMISSIONS  INSURANCE.  (1)  An  insurance  consultant
 43    shall maintain with the director a current certificate of errors and omissions
 44    insurance in an amount established by the director by rule.
 45        (2)  If  the  director  determines  that  errors  and  omissions insurance
 46    required under this section is not generally available at a  reasonable  cost,
 47    the  director  may,  by  rule, suspend the requirement of such insurance.  The
 48    requirement shall be reimposed when, in the  determination  of  the  director,
 49    such insurance becomes generally available again at a reasonable cost.
                                                                        
 50        41-1032.  RULES.  The  director  may,  in  accordance with section 41-211,
 51    Idaho Code, promulgate reasonable rules as are necessary or  proper  to  carry
 52    out the purposes of this chapter.
                                                                        
                                           20
                                                                        
  1        41-1033.  PROCEDURE FOLLOWING SUSPENSION, REVOCATION -- REINSTATEMENT. (1)
  2    Upon  suspension, revocation, or refusal to continue any license, the director
  3    shall notify the licensee as provided in section 41-212(3), Idaho  Code,  and,
  4    in  the  case  of  a producer who holds appointments from insurers, shall give
  5    like notice to the insurers represented.
  6        (2)  Suspension, revocation, or refusal of any one (1) license held by the
  7    licensee under title 41, Idaho Code, shall automatically  suspend,  revoke  or
  8    refuse continuation of all other licenses held by the licensee under title 41,
  9    Idaho Code.
 10        (3)  The director shall not issue a license under title 41, Idaho Code, to
 11    or  as  to  any  person  whose license has been revoked or continuance refused
 12    until after the expiration of one (1) year from the date of such revocation or
 13    refusal or, if judicial review of such revocation or refusal is sought, within
 14    one (1) year from the date of a final court  order  or  decree  affirming  the
 15    revocation  or refusal. In the event the former licensee again files an appli-
 16    cation for a license under title 41, Idaho Code, the director may require  the
 17    applicant  to  show good cause why the prior revocation or refusal to continue
 18    his license shall not be deemed a bar to the issuance of a new license.
                                                                        
 19        41-1034.  RETURN OF LICENSE. (1) All licenses, although issued and  deliv-
 20    ered  as  to the licensee producer, consultant, adjuster or surplus lines bro-
 21    ker, shall at all times be the property of the state of Idaho. Upon any  expi-
 22    ration,  termination, suspension or revocation of the license, the licensee or
 23    other person having possession or custody of the license shall deliver  it  to
 24    the director either by personal delivery or by mail.
 25        (2)  In the case of any license that is lost, stolen or destroyed while in
 26    the possession of a licensee or other person, the director may, in lieu of the
 27    return  of  the license, accept the affidavits of the licensee or other person
 28    responsible for or involved in the safekeeping of such license concerning  the
 29    facts of the loss, theft or destruction.
                                                                        
 30        41-1035.  INACTIVE  STATUS.  (1) Any individual producer or consultant who
 31    does not want to actively continue in the business of insurance may apply  for
 32    inactive status of his license on forms prescribed by the director. The direc-
 33    tor,  in his discretion, may grant or deny the application for inactive status
 34    and shall notify the licensee of this decision in writing. Inactive status  of
 35    a  license, once granted, shall apply to all licenses held by the licensee and
 36    shall continue in force until reactivated pursuant to this  section  or  until
 37    the license is suspended or revoked pursuant to this chapter.
 38        (2)  During  the  period  that  a licensee remains on inactive status, the
 39    licensee may not transact the business of insurance in this state or engage in
 40    any other insurance activity which requires an active license. A  licensee  on
 41    inactive  status  may,  subject to the terms of an insurer's contract with the
 42    licensee, continue to receive commissions or other  compensation  relative  to
 43    business written by such licensee during active license status.
 44        (3)  Any  individual  producer  or  consultant  whose license is placed on
 45    inactive status shall be exempt  from  compliance  with  continuing  education
 46    requirements.
 47        (4)  An individual producer or consultant whose license is placed on inac-
 48    tive status shall be subject to payment of the applicable continuation fees.
 49        (5)  An  individual  producer  or  consultant whose license is on inactive
 50    status may apply for reactivation of a license  on  forms  prescribed  by  the
 51    director.  The  request  for reactivation shall include proof of completion of
 52    twenty (20) hours of continuing education earned during the twelve (12) months
 53    prior to reactivation or proof that the producer or  consultant  has  retested
                                                                        
                                           21
                                                                        
  1    and met the examination requirements as to any line or kind of insurance to be
  2    transacted under the reactivated license. The director, in his discretion, may
  3    grant or deny the application for reactivation.
                                                                        
  4        41-1036.  SEVERABILITY.  If  any provision of this chapter or its applica-
  5    tion to any person or circumstance is held invalid, the  invalidity  does  not
  6    affect  other  provisions  or  applications of this chapter which can be given
  7    effect without the invalid provision or application, and to this end the  pro-
  8    visions of this chapter are severable.
                                                                        
  9        SECTION  4.  That  Section 41-1108, Idaho Code, be, and the same is hereby
 10    amended to read as follows:
                                                                        
 11        41-1108.  OTHER PROVISIONS APPLICABLE. The following sections  of  chapter
 12    10, title 41, Idaho Code, shall, to the extent so applicable, also apply as to
 13    adjuster licenses:
 14        (1)  41-10307(51)  (misrepresentations,  etc.  in  application  -- penalty
 15    (application for producer license).
 16        (2)  41-1008 (producer license).
 17        (3)  41-104311 (issuance, refusal of license).
 18        (34)  41-104613 (continuation, expiration of license, continuing education
 19    statement).
 20        (4)  41-1076 (change of address).
 21        (5)  41-107716 (administrative penalty -- suspension, revocation,  refusal
 22    of license).
 23        (6)  41-107833  (procedure  following suspension, revocation -- reinstate-
 24    ment).
 25        (7)  41-107934 (return of license).
                                                                        
 26        SECTION 5.  That Section 41-1223, Idaho Code, be, and the same  is  hereby
 27    amended to read as follows:
                                                                        
 28        41-1223.  LICENSING  OF  SURPLUS  LINE  BROKERS.  (1) Any individual while
 29    licensed in this state as a resident general lines agent producer licensed for
 30    property or casualty insurance who has had at least two (2) years'  experience
 31    as a licensed agent or broker for the lines of insurance for which he is seek-
 32    ing  to be licensed as a surplus lines broker, and who is deemed by the direc-
 33    tor to be competent and trustworthy with respect to the  handling  of  surplus
 34    lines, and while maintaining an office at a designated location in this state,
 35    may be licensed as a surplus line broker.
 36        (2)  Application for the license shall be made to the director on forms as
 37    designated and furnished by the director.
 38        (3)  The  license  and continuation fee shall be as specified in set forth
 39    by rule pursuant to section 41-401, Idaho Code. (fee schedule).
 40        (4)  The license and licensee shall be subject to  the  applicable  provi-
 41    sions  of  chapter  10, title 41, Idaho Code (agents, brokers, solicitors pro-
 42    ducers and consultants -- licensing). requirements and procedures).
                                                                        
 43        SECTION 6.  That Section 41-1315A, Idaho Code, be, and the same is  hereby
 44    amended to read as follows:
                                                                        
 45        41-1315A.  DISCOUNTS  TO  EMPLOYEES.  No  provision of this code title 41,
 46    Idaho Code, shall be deemed to prohibit allowance by  an  insurer,  agent,  or
 47    broker to the insurer's or licensee's bona fide full-time salaried employee of
 48    a  discount from the premium otherwise payable for insurance on the employee's
                                                                        
                                           22
                                                                        
  1    life or health or those of his dependents, or on the  employee's  property  or
  2    risks  other than property or risks used or involved in business operations of
  3    the employee other than as an employee of the insurer, agent, or  broker.  The
  4    amount  of  discount shall in no event exceed the amount of agent's commission
  5    which the employer insurer may otherwise pay, or the amount of  commission  to
  6    be  received  by  the employer agent or broker, with respect to the insurance.
  7    For the purposes of section 41-1033 (controlled  business),  Idaho  Code,  the
  8    insurance  as  to employees of an agent or broker shall be included within the
  9    controlled business of the licensee upon the basis of the commission which the
 10    licensee was entitled to receive as if the discount had not been allowed.
                                                                        
 11        SECTION 7.  That Section 41-3435, Idaho Code, be, and the same  is  hereby
 12    amended to read as follows:
                                                                        
 13        41-3435.  AGENTS  PRODUCER LICENSING. (1) Agents Producers or persons rep-
 14    resenting a  service  corporation  in  the  solicitation  and  negotiation  of
 15    subscriber's  contracts  shall qualify for and be licensed as agents producers
 16    of the service corporation in the same manner and in compliance with the  same
 17    applicable  qualifications,  licensing procedures and fees as apply under this
 18    code as to agents producers of disability insurers; except that:
 19        (a)  Any such person who holds a valid license as an agent a producer  for
 20        a disability insurer issued under chapter 10, title 41, Idaho Code, may be
 21        appointed as the agent for such service corporation without further exami-
 22        nation or other compliance with chapter 10, title 41, Idaho Code; and
 23        (b)  Nothing in this section shall prevent such person from being licensed
 24        as  a  producer  and  appointed as an agent for a life insurer or insurers
 25        under chapter 10, title 41, Idaho Code, and concurrently being licensed as
 26        an agent a producer for such a service corporation.
 27        (2)  Service corporations shall may file appointment  of  such  agents  or
 28    representatives  in  the  same  manner as provided in section 41-104718, Idaho
 29    Code, with respect to agents producers of insurers.
 30        (3)  The exceptions to license requirements set forth in chapter 10, title
 31    41, Idaho Code, shall also apply as to service corporations.
                                                                        
 32        SECTION 8.  That Section 41-4703, Idaho Code, be, and the same  is  hereby
 33    amended to read as follows:
                                                                        
 34        41-4703.  DEFINITIONS. As used in this chapter:
 35        (1)  "Actuarial  certification"  means  a written statement by a member of
 36    the American academy of actuaries or other individual acceptable to the direc-
 37    tor that a small employer carrier is in compliance with the provisions of sec-
 38    tion 41-4706, Idaho Code, based upon the person's examination and including  a
 39    review  of  the  appropriate records and the actuarial assumptions and methods
 40    used by the small employer carrier in establishing premium rates for  applica-
 41    ble health benefit plans.
 42        (2)  "Affiliate"  or  "affiliated" means any entity or person who directly
 43    or indirectly through one (1) or more  intermediaries,  controls  or  is  con-
 44    trolled by, or is under common control with, a specified entity or person.
 45        (3)  "Agent" means an agent a producer as defined in section 41-102103(9),
 46    Idaho Code, or a broker as defined in section 41-1024, Idaho Code.
 47        (4)  "Base  premium rate" means, for each class of business as to a rating
 48    period, the lowest premium rate charged or that could have been charged  under
 49    a  rating  system  for that class of business by the small employer carrier to
 50    small employers with similar case characteristics  for  health  benefit  plans
 51    with the same or similar coverage.
                                                                        
                                           23
                                                                        
  1        (5)  "Board"  means  the board of directors of the small employer reinsur-
  2    ance program and the individual high risk reinsurance pool as provided for  in
  3    section 41-5502, Idaho Code.
  4        (6)  "Carrier"  means  any  entity  that provides health insurance in this
  5    state. For the purposes of this chapter, carrier includes  an  insurance  com-
  6    pany,  a  hospital  or  professional  service corporation, a fraternal benefit
  7    society, a health   maintenance  organization,  any  entity  providing  health
  8    insurance coverage or benefits to residents of this state as certificate hold-
  9    ers  under  a  group policy issued or delivered outside of this state, and any
 10    other entity providing a plan of health insurance or health  benefits  subject
 11    to state insurance regulation.
 12        (7)  "Case  characteristics"  means demographic or other objective charac-
 13    teristics of a small employer that are considered by the small  employer  car-
 14    rier  in  the  determination of premium rates for the small employer, provided
 15    that claim experience, health status and duration of  coverage  shall  not  be
 16    case characteristics for the purposes of this chapter.
 17        (8)  "Catastrophic  health benefit plan" means a higher limit health bene-
 18    fit plan developed pursuant to section 41-4712, Idaho Code.
 19        (9)  "Class of business" means all or a separate grouping of small employ-
 20    ers established pursuant to section 41-4705, Idaho Code.
 21        (10) "Control"  shall  be  defined  in  the  same  manner  as  in  section
 22    41-3801(2), Idaho Code.
 23        (11) "Dependent" means a spouse, an unmarried child under the age of nine-
 24    teen (19) years, an unmarried child who is a full-time student under  the  age
 25    of  twenty-three  (23) years and who is financially dependent upon the parent,
 26    and an unmarried child of any age who is medically certified as  disabled  and
 27    dependent upon the parent.
 28        (12) "Director"  means  the director of the department of insurance of the
 29    state of Idaho.
 30        (13) "Eligible employee" means an employee who works on a full-time  basis
 31    and  has  a  normal  work  week  of thirty (30) or more hours or, by agreement
 32    between the employer and the carrier, an employee who  works   between  twenty
 33    (20)  and  thirty  (30) hours per week. The term includes a sole proprietor, a
 34    partner of a partnership, and an independent contractor, if the  sole  propri-
 35    etor,  partner  or  independent  contractor is included as an employee under a
 36    health benefit plan of a small employer, but does not include an employee  who
 37    works on a part-time, temporary, seasonal or substitute basis. The term eligi-
 38    ble  employee  may include public officers and public employees without regard
 39    to the number of hours worked when designated by a small employer.
 40        (14) "Established geographic service area" means  a  geographic  area,  as
 41    approved  by  the director and based on the carrier's certificate of authority
 42    to transact insurance in this state, within which the carrier is authorized to
 43    provide coverage.
 44        (15) "Health benefit plan" means any hospital or medical policy or certif-
 45    icate, any subscriber contract provided by a hospital or professional  service
 46    corporation,  or managed care organization subscriber contract. Health benefit
 47    plan does not include policies or certificates of insurance for specific  dis-
 48    ease,  hospital  confinement indemnity, accident-only, credit, dental, vision,
 49    medicare supplement, long-term care, or disability income  insurance,  student
 50    health  benefits  only coverage issued as a supplement to liability insurance,
 51    worker's compensation or similar insurance, automobile medical payment  insur-
 52    ance  or  nonrenewable  short-term coverage issues for a period of twelve (12)
 53    months or less.
 54        (16) "Index rate" means, for each class of business as to a rating  period
 55    for  small employers with similar case characteristics, the arithmetic average
                                                                        
                                           24
                                                                        
  1    of the applicable base premium rate  and  the  corresponding  highest  premium
  2    rate.
  3        (17) "Late  enrollee" means an eligible employee or dependent who requests
  4    enrollment in a health benefit plan of a small employer following the  initial
  5    enrollment  period during which the individual is entitled to enroll under the
  6    terms  of the health benefit plan, provided that the initial enrollment period
  7    is a period of at least thirty (30) days. However,  an  eligible  employee  or
  8    dependent shall not be considered a late enrollee if:
  9        (a)  The individual meets each of the following:
 10             (i)   The  individual  was covered under qualifying previous coverage
 11             at the time of the initial enrollment;
 12             (ii)  The individual lost coverage under qualifying previous coverage
 13             as a result of termination  of  employment  or  eligibility,  or  the
 14             involuntary termination of the qualifying previous coverage; and
 15             (iii) The  individual  requests  enrollment  within  thirty (30) days
 16             after termination of the qualifying previous coverage.
 17        (b)  The individual is employed  by  an  employer  which  offers  multiple
 18        health  benefit plans and the individual elects a different plan during an
 19        open enrollment period.
 20        (c)  A court has ordered coverage be provided for a  spouse  or  minor  or
 21        dependent child under a covered employee's health benefit plan and request
 22        for enrollment is made within thirty (30) days after issuance of the court
 23        order.
 24        (d)  The individual first becomes eligible.
 25        (e)  If  an  individual seeks to enroll a dependent during the first sixty
 26        (60) days of eligibility, the  coverage  of  the  dependent  shall  become
 27        effective:
 28             (i)   In  the  case  of marriage, not later than the first day of the
 29             first month beginning  after  the  date  the  completed  request  for
 30             enrollment is received;
 31             (ii)  In  the  case  of  a  dependent's birth, as of the date of such
 32             birth; or
 33             (iii) In the case of a dependent's adoption or  placement  for  adop-
 34             tion, the date of such adoption or placement for adoption.
 35        (18) "New business premium rate" means, for each class of business as to a
 36    rating  period, the lowest premium rate charged or offered or which could have
 37    been charged or offered by the small employer carrier to small employers  with
 38    similar  case  characteristics  for newly issued health benefit plans with the
 39    same or similar coverage.
 40        (19) "Plan of operation" means the plan of operation of the program estab-
 41    lished pursuant to section 41-4711, Idaho Code.
 42        (20) "Plan year" means the year that is designated as the plan year in the
 43    plan document of a group health benefit plan, except that if the plan document
 44    does not designate a plan year or if there is no plan document, the year  plan
 45    is:
 46        (a)  The deductible/limit year used under the plan;
 47        (b)  If  the plan does not impose deductibles or limits on a yearly basis,
 48        then the plan year is the policy year;
 49        (c)  If the plan does not impose deductibles or limits on a  yearly  basis
 50        or  the  insurance policy is not renewed on an annual basis, then the plan
 51        year is the employer's taxable year; or
 52        (d)  In any other case, the plan year is the calendar year.
 53        (21) "Premium" means all moneys paid by  a  small  employer  and  eligible
 54    employees  as a condition of receiving coverage from a small employer carrier,
 55    including any fees or other contributions associated with the  health  benefit
                                                                        
                                           25
                                                                        
  1    plan.
  2        (22) "Program"  means the Idaho small employer reinsurance program created
  3    in section 41-4711, Idaho Code.
  4        (23) "Qualifying previous coverage"  and  "qualifying  existing  coverage"
  5    means benefits or coverage provided under:
  6        (a)  Medicare  or  medicaid,  civilian  health  and  medical  program  for
  7        uniformed  services  (CHAMPUS), the Indian health service program, a state
  8        health benefit risk pool or any other similar publicly sponsored  program;
  9        or
 10        (b)  Any other group or individual health insurance policy or health bene-
 11        fit  arrangement  whether  or  not  subject  to  the state insurance laws,
 12        including coverage provided by a health maintenance organization, hospital
 13        or professional service corporation, or a fraternal benefit society,  that
 14        provides  benefits  similar  to  or  exceeding benefits provided under the
 15        basic health benefit plan.
 16        (24) "Rating period" means the calendar period  for  which  premium  rates
 17    established by a small employer carrier are assumed to be in effect.
 18        (25) "Reinsuring  carrier" means a small employer carrier participating in
 19    the reinsurance program pursuant to section 41-4711, Idaho Code.
 20        (26) "Restricted network provision" means any provision of a health  bene-
 21    fit  plan that conditions the payment of benefits, in whole or in part, on the
 22    use of health care providers that have entered into a contractual  arrangement
 23    with the carrier to provide health care services to covered individuals.
 24        (27) "Risk-assuming carrier" means a small employer carrier whose applica-
 25    tion is approved by the director pursuant to section 41-4710, Idaho Code.
 26        (28) "Small  employer" means any person, firm, corporation, partnership or
 27    association that is actively engaged in business that, employed an average  of
 28    at  least  two  (2) but no more than fifty (50) eligible employees on business
 29    days during the preceding calendar year and that employs at least two (2)  but
 30    no  more than fifty (50) eligible employees on the first day of the plan year,
 31    the majority of whom were and are employed within this state.  In  determining
 32    the  number of eligible employees, companies that are affiliated companies, or
 33    that are eligible to file a combined tax return for purposes  of  state  taxa-
 34    tion, shall be considered one (1) employer.
 35        (29) "Small  employer basic health benefit plan" means a lower cost health
 36    benefit plan developed pursuant to section 41-4712, Idaho Code.
 37        (30) "Small employer carrier" means a carrier that offers  health  benefit
 38    plans  covering  eligible employees of one (1) or more small employers in this
 39    state.
 40        (31) "Small employer catastrophic health  benefit  plan"  means  a  higher
 41    limit health benefit plan developed pursuant to section 41-4712, Idaho Code.
 42        (32) "Small  employer standard health benefit plan" means a health benefit
 43    plan developed pursuant to section 41-4712, Idaho Code.
                                                                        
 44        SECTION 9.  That Section 41-4933, Idaho Code, be, and the same  is  hereby
 45    amended to read as follows:
                                                                        
 46        41-4933.  EXISTING  INSURANCE LAWS TO APPLY TO THE TRUST FUND WITH CERTAIN
 47    EXCEPTIONS. The trust fund shall comply with all of the applicable  provisions
 48    of title 41, Idaho Code, with certain exceptions as follows:
 49        (1)  The creation of the trust fund by act of the legislature shall not be
 50    deemed  to be an ownership, control or operation of an insurer by a governmen-
 51    tal entity, as referred to in section 41-309,  Idaho  Code,  and  the  surplus
 52    funds  of  the  trust  fund  shall  be  considered to be dedicated and held in
 53    reserve for the purpose of providing funds for the payment of  claims  arising
                                                                        
                                           26
                                                                        
  1    out of the discharge of petroleum products from tanks covered by a contract of
  2    insurance  issued  to the tank owner or operator by the trust fund as provided
  3    for in section 41-4905, Idaho Code. The absolute control  of  the  trust  fund
  4    shall be vested in the manager of the state insurance fund as trustee.
  5        (2)  The  provisions of this chapter shall be construed to be contained in
  6    the document of organization and bylaws of the trust fund for purposes of sec-
  7    tions 41-319, 41-320 and 41-322, Idaho Code, and the director  shall  issue  a
  8    certificate  of  registration  to  and  in the name of the trust fund upon his
  9    finding that it has met all other appropriate provisions of  the  Idaho  Code,
 10    including sections 41-313, 41-316 and 41-316A, Idaho Code.
 11        (3)  Section 41-337, Idaho Code, shall not apply to contracts of insurance
 12    issued by the trust fund.
 13        (4)  Sections 41-10304 and 41-1022, Idaho Code, shall not apply to employ-
 14    ees of the state insurance fund or the trust fund.
 15        (5)  Section  41-1103,  Idaho  Code,  shall  not apply to employees of the
 16    state insurance fund or the trust fund, provided the employees restrict  their
 17    claims  adjusting  and investigation operations only to those contracts issued
 18    by the trust fund.
 19        (6)  Except as otherwise provided in this chapter, chapter 28,  title  41,
 20    Idaho Code, and chapter 14, title 30, Idaho Code, shall not apply to the trust
 21    fund  nor  shall this trust fund be construed to be a domestic mutual insurer,
 22    nor a reciprocal insurer, nor any other type of insurer currently regulated by
 23    title 41, Idaho Code, and the only organizational requirements of  this  trust
 24    fund shall be those enumerated in this chapter.
                                                                        
 25        SECTION  10.  That Section 41-5203, Idaho Code, be, and the same is hereby
 26    amended to read as follows:
                                                                        
 27        41-5203.  DEFINITIONS. As used in this chapter:
 28        (1)  "Actuarial certification" means a written statement by  a  member  of
 29    the American academy of actuaries or other individual acceptable to the direc-
 30    tor that an individual carrier is in compliance with the provisions of section
 31    41-5206,  Idaho  Code,  based  upon  the  person's examination and including a
 32    review of the appropriate records and the actuarial  assumptions  and  methods
 33    used  by  the  individual carrier in establishing premium rates for applicable
 34    health benefit plans.
 35        (2)  "Affiliate" or "affiliated" means any entity or person  who  directly
 36    or  indirectly  through  one  (1)  or more intermediaries, controls or is con-
 37    trolled by, or is under common control with, a specified entity or person.
 38        (3)  "Agent" means an agent a  producer  as  defined  in  section  41-1021
 39    03(9), Idaho Code, or a broker as defined in section 41-1024, Idaho Code.
 40        (4)  "Base  premium rate" means, as to a rating period, the lowest premium
 41    rate charged or that could have been charged under  a  rating  system  by  the
 42    individual carrier to individuals with similar case characteristics for health
 43    benefit plans with the same or similar coverage.
 44        (5)  "Carrier"  means  any  entity  that provides health insurance in this
 45    state. For purposes of this chapter, carrier includes an insurance company,  a
 46    hospital  or  professional service corporation, a fraternal benefit society, a
 47    health maintenance organization, any entity providing health insurance  cover-
 48    age  or  benefits  to  residents  of this state as certificate holders under a
 49    group policy issued or delivered outside of this state, and any  other  entity
 50    providing  a  plan  of  health  insurance  or health benefits subject to state
 51    insurance regulation.
 52        (6)  "Case characteristics" means demographic or other  objective  charac-
 53    teristics  of  an  individual that are considered by the individual carrier in
                                                                        
                                           27
                                                                        
  1    the determination of premium rates for the  individual,  provided  that  claim
  2    experience,  health  status and duration of coverage shall not be case charac-
  3    teristics for the purposes of this chapter.
  4        (7)  "Control"  shall  be  defined  in  the  same  manner  as  in  section
  5    41-3801(2), Idaho Code.
  6        (8)  "Dependent" means a spouse, an unmarried child under the age of nine-
  7    teen (19) years, an unmarried child who is a full-time student under  the  age
  8    of  twenty-three  (23) years and who is financially dependent upon the parent,
  9    and an  unmarried child of any age who is medically certified as disabled  and
 10    dependent upon the parent.
 11        (9)  "Director"  means  the director of the department of insurance of the
 12    state of Idaho.
 13        (10) "Eligible individual" means an Idaho resident individual or dependent
 14    of an Idaho resident who is under the age of sixty-five  (65)  years,  is  not
 15    eligible  for  coverage  under  a group health plan, part A or part B of title
 16    XVIII of the social security act (medicare), or a state plan under  title  XIX
 17    (medicaid) or any successor program, and who does not have other health insur-
 18    ance  coverage.  An  "eligible individual" can be the dependent of an eligible
 19    employee, which eligible employee is receiving health insurance benefits  sub-
 20    ject to the regulation of title 41, Idaho Code.
 21        (11) "Established  geographic  service  area"  means a geographic area, as
 22    approved by the director and based on the carrier's certificate  of  authority
 23    to transact insurance in this state, within which the carrier is authorized to
 24    provide coverage.
 25        (12) "Health benefit plan" means any hospital or medical policy or certif-
 26    icate,  any subscriber contract provided by a hospital or professional service
 27    corporation, or health maintenance organization  subscriber  contract.  Health
 28    benefit  plan  does not include policies or certificates of insurance for spe-
 29    cific disease, hospital confinement indemnity, accident-only, credit,  dental,
 30    vision,  medicare  supplement, long-term care, or disability income insurance,
 31    student health benefits only, coverage issued as  a  supplement  to  liability
 32    insurance, worker's compensation or similar insurance, automobile medical pay-
 33    ment  insurance,  or  nonrenewable  short-term coverage issued for a period of
 34    twelve (12) months or less.
 35        (13) "Index rate" means, as to a rating period for individuals with  simi-
 36    lar  case  characteristics, the arithmetic average of the applicable base pre-
 37    mium rate and the corresponding highest premium rate.
 38        (14) "Individual basic health benefit plan" means a lower cost health ben-
 39    efit plan developed pursuant to chapter 55, title 41, Idaho Code.
 40        (15) "Individual catastrophic A health benefit plan" means a higher  limit
 41    health benefit plan developed pursuant to chapter 55, title 41, Idaho Code.
 42        (16) "Individual  catastrophic B health benefit plan" means a health bene-
 43    fit plan with limits higher than an individual catastrophic A  health  benefit
 44    plan developed pursuant to chapter 55, title 41, Idaho Code.
 45        (17) "Individual standard health benefit plan" means a health benefit plan
 46    developed pursuant to chapter 55, title 41, Idaho Code.
 47        (18) "New  business premium rate" means, as to a rating period, the lowest
 48    premium rate charged or offered or which could have been charged or offered by
 49    the individual carrier to individuals with similar  case  characteristics  for
 50    newly issued health benefit plans with the same or similar coverage.
 51        (19) "Premium" means all moneys paid by an individual and eligible depend-
 52    ents  as  a condition of receiving coverage from a carrier, including any fees
 53    or other contributions associated with the health benefit plan.
 54        (20) "Qualifying previous coverage"  and  "qualifying  existing  coverage"
 55    means benefits or coverage provided under:
                                                                        
                                           28
                                                                        
  1        (a)  Medicare  or  medicaid,  civilian  health  and  medical  program  for
  2        uniformed  services  (CHAMPUS), the Indian health service program, a state
  3        health benefit risk pool, or any other similar publicly sponsored program;
  4        or
  5        (b)  Any group or individual health insurance  policy  or  health  benefit
  6        arrangement  whether or not subject to the state insurance laws, including
  7        coverage provided by a managed care organization, hospital or professional
  8        service corporation, or a fraternal benefit society, that  provides  bene-
  9        fits similar to or exceeding benefits provided under the basic health ben-
 10        efit plan.
 11        (21) "Rating  period"  means  the  calendar period for which premium rates
 12    established by a carrier are assumed to be in effect.
 13        (22) "Reinsuring carrier" means a carrier participating in the Idaho indi-
 14    vidual high risk reinsurance pool established in chapter 55, title  41,  Idaho
 15    Code.
 16        (23) "Restricted  network provision" means any provision of a health bene-
 17    fit plan that conditions the payment of benefits, in whole or in part, on  the
 18    use  of health care providers that have entered into a contractual arrangement
 19    with the carrier to provide health care services to covered individuals.
 20        (24) "Risk-assuming carrier" means a carrier whose application is approved
 21    by the director pursuant to section 41-5210, Idaho Code.
 22        (25) "Individual carrier" means a carrier that offers health benefit plans
 23    covering eligible individuals and their dependents.
                                                                        
 24        SECTION 11.  That Section 41-5501, Idaho Code, be, and the same is  hereby
 25    amended to read as follows:
                                                                        
 26        41-5501.  DEFINITIONS. As used in this chapter:
 27        (1)  "Agent" means an agent a producer as defined in section 41-102103(9),
 28    Idaho Code, or a broker as defined in section 41-1024, Idaho Code.
 29        (2)  "Board"  means the board of directors of the Idaho high risk individ-
 30    ual reinsurance pool established in this chapter and the Idaho small  employer
 31    reinsurance program established in section 41-4711, Idaho Code.
 32        (3)  "Carrier"  means  any  entity  that provides health insurance in this
 33    state. For purposes of this chapter, carrier includes  an  insurance  company,
 34    any other entity providing reinsurance including excess or stop loss coverage,
 35    a hospital or professional service corporation, a fraternal benefit society, a
 36    managed  care  organization, any entity providing health insurance coverage or
 37    benefits to residents of this state as certificate holders under a group  pol-
 38    icy  issued or delivered outside of this state, and any other entity providing
 39    a plan of health insurance or health benefits subject to state insurance regu-
 40    lation.
 41        (4)  "Dependent" means a spouse, an unmarried child under the age of nine-
 42    teen (19) years, an unmarried child who is a full-time student under  the  age
 43    of  twenty-three  (23) years and who is financially dependent upon the parent,
 44    and an unmarried child of any age who is medically certified as  disabled  and
 45    dependent upon the parent.
 46        (5)  "Director"  means  the director of the department of insurance of the
 47    state of Idaho.
 48        (6)  "Eligible individual" means an Idaho resident individual or dependent
 49    of an Idaho resident who is under the age of sixty-five  (65)  years,  is  not
 50    eligible  for  coverage  under  a group health plan, part A or part B of title
 51    XVIII of the social security act (medicare), or a state plan under  title  XIX
 52    (medicaid) or any successor program, and who does not have other health insur-
 53    ance  coverage.  Coverage  under  a  basic,  standard, catastrophic A or cata-
                                                                        
                                           29
                                                                        
  1    strophic B health benefit plan shall not be available to any individual who is
  2    covered under other health insurance coverage. For purposes of  this  chapter,
  3    to  be  eligible,  an  individual  must  also meet the requirements of section
  4    41-5510, Idaho Code.
  5        (7)  "Health benefit plan" means any hospital or medical policy or certif-
  6    icate, any subscriber contract provided by a hospital or professional  service
  7    corporation,  or  health  maintenance organization subscriber contract. Health
  8    benefit plan does not include policies or certificates of insurance  for  spe-
  9    cific  disease, hospital confinement indemnity, accident-only, credit, dental,
 10    vision, medicare supplement, long-term care, or disability  income  insurance,
 11    student  health  benefits  only,  coverage issued as a supplement to liability
 12    insurance, worker's compensation or similar insurance, automobile medical pay-
 13    ment insurance, or nonrenewable short-term coverage issued  for  a  period  of
 14    twelve (12) months or less.
 15        (8)  "Individual basic health benefit plan" means a lower cost health ben-
 16    efit plan developed pursuant to section 41-5511, Idaho Code.
 17        (9)  "Individual carrier" means a carrier that offers health benefit plans
 18    covering eligible individuals and their dependents.
 19        (10) "Individual  catastrophic A health benefit plan" means a higher limit
 20    health benefit plan developed pursuant to section 41-5511, Idaho Code.
 21        (11) "Individual catastrophic B health benefit plan" means a health  bene-
 22    fit  plan  offering  limits  higher  than a catastrophic A health benefit plan
 23    developed pursuant to section 41-5511, Idaho Code.
 24        (12) "Individual standard health benefit plan" means a health benefit plan
 25    developed pursuant to section 41-5511, Idaho Code.
 26        (13) "Plan" or "pool plan" means the  individual  basic,  standard,  cata-
 27    strophic  A  or  catastrophic  B plan established pursuant to section 41-5511,
 28    Idaho Code.
 29        (14) "Plan of operation" means the plan of  operation  of  the  individual
 30    high risk reinsurance pool established pursuant to this chapter.
 31        (15) "Pool" means the Idaho high risk reinsurance pool.
 32        (16) "Premium" means all moneys paid by an individual and eligible depend-
 33    ents  as  a condition of receiving coverage from a carrier, including any fees
 34    or other contributions associated with the health benefit plan.
 35        (17) "Qualifying previous coverage"  and  "qualifying  existing  coverage"
 36    means benefits or coverage provided under:
 37        (a)  Medicare  or  medicaid,  civilian  health  and  medical  program  for
 38        uniformed  services  (CHAMPUS), the Indian health service program, a state
 39        health benefit risk pool, or any other similar publicly sponsored program;
 40        or
 41        (b)  Any group or individual health insurance  policy  or  health  benefit
 42        arrangement  whether or not subject to the state insurance laws, including
 43        coverage provided by a managed care organization, hospital or professional
 44        service corporation, or a fraternal benefit society, that  provides  bene-
 45        fits similar to or exceeding benefits provided under the basic health ben-
 46        efit plan.
 47        (18) "Reinsurance  premium" means the premium set by the board pursuant to
 48    section 41-5506, Idaho Code, to be paid by  a  reinsuring  carrier  for  plans
 49    issued under the pool.
 50        (19) "Reinsuring  carrier" means a carrier participating in the individual
 51    high risk reinsurance pool established by this chapter.
 52        (20) "Restricted network provision" means any provision of a health  bene-
 53    fit  plan that conditions the payment of benefits, in whole or in part, on the
 54    use of health care providers that have entered into a contractual  arrangement
 55    with the carrier to provide health care services to covered individuals.

Amendment


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                                                     Moved by    Callister           
                                                                        
                                                     Seconded by Gagner              
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                               HOUSE AMENDMENT TO H.B. NO. 35
                                                                        
  1                               AMENDMENTS TO SECTION 3
  2        On page 17 of the printed bill, in line 51, delete "or"; and on  page  18,
  3    in line 2, delete "." and insert: "; or"; and  following line 2, insert:
  4        "(f)  Anyone  rendering  services  as  an expert who would qualify as such
  5        pursuant to the Idaho rules of evidence.".
                                                     Moved by    Callister           
                                                                        
                                                     Seconded by Gagner              
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                               HOUSE AMENDMENT TO H.B. NO. 35
                                                                        
  6                               AMENDMENTS TO SECTION 3
  7        On page 15 of the printed bill, delete lines 20 through 23 and insert:
  8        "(a)  Any documents, materials or other information obtained by the direc-
  9        tor in an investigation pursuant to this"; delete lines 25 through 35  and
 10        insert:  "disclosure  under  chapter  3, title 9, Idaho Code. However, the
 11        director is authorized to use the documents, materials or  other  informa-
 12        tion  in  the  furtherance  of any regulatory or legal action brought as a
 13        part of the director's duties without court intervention.";  and  in  line
 14        36, delete "(c)" and insert: "(b)".
 15        On  page  16, in line 3, delete "(d)" and insert: "(c)"; in line 6, delete
 16    "(c)" and insert: "(b)"; and in line 7, delete "(e)" and insert: "(d)".
                                                     Moved by    Goedde              
                                                                        
                                                     Seconded by Cameron             
                                                                        
                                                                        
                                       IN THE SENATE
                        SENATE AMENDMENT TO H.B. NO. 35, As Amended
                                                                        
 17                               AMENDMENTS TO SECTION 3
 18        On page 4 of the engrossed bill,  in  line  5,  delete  "AND  CONSULTANT";
 19    delete  lines  25  through  28; in line 29, delete "(3)" and insert: "(2)"; in
 20    line 33, delete "(4)" and insert: "(3)"; in line 37, delete "(5)" and  insert:
 21    "(4)";  in  line  47, delete "(6)" and insert: "(5)"; in line 49, delete "(7)"
 22    and insert: "(6)"; on page 5, in line 3, delete "(8)" and  insert:  "(7)";  in
 23    line  4,  delete "(9)" and insert: "(8)"; in line 6, delete "(10)" and insert:
 24    "(9)"; in line 8, delete "(11)" and insert: "(10)"; in line 10, delete  "(12)"
 25    and  insert: "(11)"; in line 13, delete "(13)" and insert: "(12)"; in line 16,
 26    delete "(14)" and insert: "(13)"; and in line 19, delete  "(15)"  and  insert:
 27    "(14)".
 28        On page 6, in line 38, delete "or an insurance consultant license".
                                 |||
                                                                        
                                          2
                                                                        
  1        On  page  9,  in line 18, delete "AND CONSULTANTS"; in line 19, delete "or
  2    nonresident consultant"; in line 22,  delete  "or  consultant";  in  line  24,
  3    delete  "or  consultant";  in line 36, delete "or consultant"; and in line 37,
  4    delete "or consultant".
  5        On page  10,  in  line  20,  delete  "consultant,";  in  line  43,  delete
  6    "consultant,";  in  line 48, delete "and resi-"; in line 49, delete "dent con-
  7    sultants".
  8        On page 11, in line 3, delete "or any consultant who is licensed  pursuant
  9    to";  in line 4, delete "section 41-1027, Idaho Code,"; in line 7, delete "and
 10    41-1027 (qualifications for resident consultant license)".
 11        On page 15, in line 21, delete ", shall  be  confidential";  in  line  22,
 12    delete  "and privileged,"; in line 23, delete "However, the director is autho-
 13    rized to use the docu-"; and delete lines 24 through 26.
 14        On page 17, delete lines 15 through 52; on page 18, delete lines 1 through
 15    53; on page 19, delete lines 1 through 42; in line 43,  delete  "41-1032"  and
 16    insert: "41-1025"; in line 46, delete "41-1033" and insert: "41-1026".
 17        On  page  20,  in line 13, delete "41-1034" and insert: "41-1027"; in line
 18    14, delete "consultant,"; in line 24, delete "41-1035" and insert:  "41-1028";
 19    also  in  line 24, delete "or consultant"; in line 38, delete "or consultant";
 20    in line 41, delete "or consultant"; in line 43,  delete  "or  consultant";  in
 21    line  47, delete "or consultant"; and in line 51, delete "41-1036" and insert:
 22    "41-1029".
                                                                        
 23                                AMENDMENT TO SECTION 5
 24        On page 21, in line 36, delete "pro-"; in line 37, delete "ducers and con-
 25    sultants" and insert: "and consultants producers".
                                                                        
 26                                 CORRECTIONS TO TITLE
 27        On page 1, in line 2, delete  "AND  INSURANCE  CONSULTANT";  in  line  14,
 28    delete  "AND  CONSULTANTS"; delete lines 25 through 28; and in line 29, delete
 29    "BY CONSULTANTS, TO PROVIDE FOR ERRORS AND OMISSIONS INSURANCE,".

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. 35, As Amended, As Amended in the Senate
                                                                        
                                       BY MR. SPEAKER
                           Requested by: Department of Insurance
                                                                        
  1                                        AN ACT
  2    RELATING TO INSURANCE PRODUCER LICENSING; AMENDING SECTION 9-340B, IDAHO CODE,
  3        TO CREATE A PUBLIC RECORDS EXEMPTION FOR RECORDS FURNISHED TO THE  DEPART-
  4        MENT  OF  INSURANCE  REGARDING  TERMINATION OF AN APPOINTMENT, EMPLOYMENT,
  5        CONTRACT OR OTHER INSURANCE BUSINESS RELATIONSHIP BETWEEN AN INSURER AND A
  6        PRODUCER; REPEALING CHAPTER 10, TITLE 41, IDAHO CODE; AMENDING  TITLE  41,
  7        IDAHO  CODE, BY THE ADDITION OF A NEW CHAPTER 10, TITLE 41, IDAHO CODE, TO
  8        PROVIDE FOR PURPOSE AND SCOPE, TO PROVIDE FOR MEANING OF TERMS, TO PROVIDE
  9        FOR DEFINITIONS, TO PROVIDE FOR REQUIREMENT OF LICENSES,  TO  PROVIDE  FOR
 10        EXCEPTIONS  TO LICENSING, TO PROVIDE FOR APPLICATIONS FOR EXAMINATIONS, TO
 11        PROVIDE FOR APPLICATIONS FOR PRODUCER LICENSES, TO  PROVIDE  FOR  PRODUCER
 12        LICENSES,  TO  PROVIDE  FOR  NONRESIDENT PRODUCER LICENSES, TO PROVIDE FOR
 13        SERVICE OF PROCESS FOR NONRESIDENT PRODUCERS, TO PROVIDE FOR  ISSUANCE  OF
 14        AND  REFUSAL TO ISSUE LICENSES, TO PROVIDE FOR EXEMPTION FROM EXAMINATION,
 15        TO PROVIDE FOR CONTINUATION AND EXPIRATION OF LICENSES AND FOR  CONTINUING
 16        EDUCATION, TO PROVIDE FOR NOTIFICATION OF USE OF ASSUMED NAMES, TO PROVIDE
 17        FOR  TEMPORARY LICENSING, TO PROVIDE FOR ADMINISTRATIVE PENALTIES, SUSPEN-
 18        SIONS, REVOCATIONS AND REFUSALS OF LICENSES, TO PROVIDE  FOR  COMMISSIONS,
 19        TO  PROVIDE  FOR  APPOINTMENTS, TO PROVIDE FOR NOTIFICATION TO DIRECTOR OF
 20        TERMINATION, TO PROVIDE FOR  RECIPROCITY,  TO  PROVIDE  FOR  REPORTING  OF
 21        ACTIONS,  TO  PROVIDE  THAT INSURERS MUST ACCEPT BUSINESS THROUGH LICENSED
 22        PRODUCERS ONLY, TO PROVIDE FOR COUNTERSIGNATURE OF POLICIES AND FOR GRANT-
 23        ING OF POWER OF ATTORNEY, TO PROVIDE FOR REPORTING AND ACCOUNTING FOR PRE-
 24        MIUMS, TO PROVIDE THAT THE DIRECTOR MAY PROMULGATE RULES, TO  PROVIDE  FOR
 25        PROCEDURE  FOLLOWING  SUSPENSION,  REVOCATION  OR  REFUSAL  TO  CONTINUE A
 26        LICENSE AND FOR REINSTATEMENT, TO PROVIDE FOR RETURN OF LICENSES, TO  PRO-
 27        VIDE FOR INACTIVE STATUS AND TO PROVIDE THAT THE PROVISIONS OF THE CHAPTER
 28        ARE  SEVERABLE;  AMENDING  SECTION 41-1108, IDAHO CODE, TO PROVIDE CORRECT
 29        REFERENCES AND CODE CITATIONS; AMENDING SECTION 41-1223,  IDAHO  CODE,  TO
 30        PROVIDE  CORRECT  TERMINOLOGY;  AMENDING  SECTION 41-1315A, IDAHO CODE, TO
 31        DELETE A REFERENCE TO A CODE CITATION AND TO MAKE  TECHNICAL  CORRECTIONS;
 32        AMENDING  SECTION  41-3435, IDAHO CODE, TO PROVIDE CORRECT TERMINOLOGY, TO
 33        PROVIDE THAT SERVICE CORPORATIONS MAY FILE APPOINTMENT OF AGENTS OR REPRE-
 34        SENTATIVES, TO PROVIDE A CORRECT CODE CITATION AND TO MAKE TECHNICAL  COR-
 35        RECTIONS; AMENDING SECTION 41-4703, IDAHO CODE, TO REVISE A DEFINITION AND
 36        TO  MAKE  TECHNICAL  CORRECTIONS; AMENDING SECTION 41-4933, IDAHO CODE, TO
 37        PROVIDE CORRECT CODE CITATIONS; AMENDING SECTION 41-5203, IDAHO  CODE,  TO
 38        REVISE  A  DEFINITION AND TO MAKE TECHNICAL CORRECTIONS; AND AMENDING SEC-
 39        TION 41-5501, IDAHO CODE, TO REVISE A DEFINITION AND TO MAKE  A  TECHNICAL
 40        CORRECTION.
                                                                        
 41    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 42        SECTION  1.  That  Section  9-340B, Idaho Code, be, and the same is hereby
 43    amended to read as follows:
                                                                        
                                           2
                                                                        
  1        9-340B.  RECORDS EXEMPT FROM DISCLOSURE -- LAW ENFORCEMENT RECORDS, INVES-
  2    TIGATORY RECORDS OF AGENCIES, WORKER'S COMPENSATION. The following records are
  3    exempt from disclosure:
  4        (1)  Investigatory records of a law enforcement agency, as defined in sec-
  5    tion 9-337(6), Idaho Code, under the conditions set forth  in  section  9-335,
  6    Idaho Code.
  7        (2)  Juvenile  records of a person maintained pursuant to chapter 5, title
  8    20, Idaho Code, except that facts contained in such records shall be furnished
  9    upon request in a manner determined by the court to persons  and  governmental
 10    and private agencies and institutions conducting pertinent research studies or
 11    having  a  legitimate interest in the protection, welfare and treatment of the
 12    juvenile who is thirteen (13) years of age or  younger.  If  the  juvenile  is
 13    petitioned  or  charged  with  an offense which would be a criminal offense if
 14    committed by an adult, the name, offense of which the juvenile was  petitioned
 15    or charged and disposition of the court shall be subject to disclosure as pro-
 16    vided  in  section  20-525,  Idaho  Code. Additionally, facts contained in any
 17    records of a juvenile maintained under chapter 5, title 20, Idaho Code,  shall
 18    be  furnished  upon  request  to  any  school  district  where the juvenile is
 19    enrolled or is seeking enrollment.
 20        (3)  (a) Until July 1, 2001, records of the department  of  correction  to
 21        the  extent  that  disclosure  thereof would interfere with the secure and
 22        orderly conduct of their operations, or the rehabilitation of  any  person
 23        in  the  custody  of  the department of correction, or would substantially
 24        prejudice or prevent the carrying out of the functions of  the  department
 25        of  correction if the public interest in confidentiality clearly outweighs
 26        the public interest in disclosure. Records exempt  from  disclosure  shall
 27        include,  but  not be limited to, those containing the names and addresses
 28        of witnesses or victims or those containing information  identifying  vic-
 29        tims or witnesses.
 30        (b)  Operation  and  security  manuals, plans or codes of county jails and
 31        buildings owned or leased by Idaho state government, a county or  a  city.
 32        "Operation  manuals"  are those internal documents of any state government
 33        agency, county or city building or jail that define  the  procedures  uti-
 34        lized  to  maintain security within the building or jail. "Plans or codes"
 35        relate only to those documents, the release of which could jeopardize  the
 36        safety  of  workers  in  those  buildings,  or adversely affect the public
 37        safety.
 38        (c)  Records of the commission of pardons and parole shall be exempt  from
 39        public  disclosure  pursuant  to  section 20-213A, Idaho Code, and section
 40        20-223, Idaho Code. Records exempt  from  disclosure  shall  also  include
 41        those containing the names, addresses and written statements of victims.
 42        (4)  Voting records of the sexual offender classification board. In accor-
 43    dance  with  section  18-8315,  Idaho  Code, the written record of the vote to
 44    classify an offender as a violent sexual predator by each board member in each
 45    case reviewed by that board member shall be exempt from disclosure to the pub-
 46    lic and shall be made available upon request only to the governor, the  chair-
 47    man of the senate judiciary and rules committee, and the chairman of the house
 48    of representatives judiciary, rules and administration committee, for all law-
 49    ful purposes.
 50        (5)  Records  of  the sheriff or Idaho state police received or maintained
 51    pursuant to section 18-3302, Idaho Code, relating to an applicant or licensee.
 52        (6)  Records of investigations prepared by the department  of  health  and
 53    welfare pursuant to its statutory responsibilities dealing with the protection
 54    of children, the rehabilitation of youth, adoptions and the commitment of men-
 55    tally ill persons.
                                                                        
                                           3
                                                                        
  1        (7)  Records including, but not limited to, investigative reports, result-
  2    ing  from  investigations  conducted into complaints of discrimination made to
  3    the Idaho human rights commission  unless  the  public  interest  in  allowing
  4    inspection and copying of such records outweighs the legitimate public or pri-
  5    vate  interest  in  maintaining  confidentiality of such records. A person may
  6    inspect and copy documents from an investigative file to which he or she is  a
  7    named  party if such documents are not otherwise prohibited from disclosure by
  8    federal law or regulation or state law. The confidentiality of this subsection
  9    will no longer apply to any record used in any judicial proceeding brought  by
 10    a  named party to the complaint or investigation, or by the Idaho human rights
 11    commission, relating to the complaint of discrimination.
 12        (8)  Records containing information obtained by the manager of  the  Idaho
 13    state  insurance fund pursuant to chapter 9, title 72, Idaho Code, from  or on
 14    behalf of employers or employees contained in underwriting and claims for ben-
 15    efits files.
 16        (9)  The worker's compensation records of the Idaho industrial  commission
 17    provided that the industrial commission shall make such records available:
 18        (a)  To  the  parties in any worker's compensation claim and to the indus-
 19        trial special indemnity fund of the state of Idaho; or
 20        (b)  To employers and prospective employers subject to the  provisions  of
 21        the  Americans  with disabilities act, 42 U.S.C. 12112, or other statutory
 22        limitations, who certify that the  information  is  being  requested  with
 23        respect  to a worker to whom the employer has extended an offer of employ-
 24        ment and will be used in accordance with the provisions of  the  Americans
 25        with disabilities act, 42 U.S.C. 12112, or other statutory limitations; or
 26        (c)  To  employers and prospective employers not subject to the provisions
 27        of the Americans with disabilities act, 42 U.S.C. 12112, or  other  statu-
 28        tory  limitations,  provided the employer presents a written authorization
 29        from the person to whom the records pertain; or
 30        (d)  To others who  demonstrate  that  the  public  interest  in  allowing
 31        inspection  and  copying  of  such records outweighs the public or private
 32        interest in maintaining the confidentiality of such records, as determined
 33        by a civil court of competent jurisdiction.
 34        (10) Records of investigations compiled by the commission on aging involv-
 35    ing vulnerable adults, as defined in section 18-1505, Idaho Code,  alleged  to
 36    be abused, neglected or exploited.
 37        (11) Criminal  history  records  and  fingerprints,  as defined by section
 38    67-3001, Idaho Code, and compiled by the  Idaho  state  police.  Such  records
 39    shall be released  only in accordance with chapter 30, title 67, Idaho Code.
 40        (12) Records  furnished  or  obtained  pursuant  to section 41-1019, Idaho
 41    Code, regarding termination of an appointment, employment, contract  or  other
 42    insurance business relationship between an insurer and a producer.
                                                                        
 43        SECTION  2.  That  Chapter  10,  Title 41, Idaho Code, be, and the same is
 44    hereby repealed.
                                                                        
 45        SECTION 3.  That Title 41, Idaho Code, be, and the same is hereby  amended
 46    by  the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
 47    ter 10, Title 41, Idaho Code, and to read as follows:
                                                                        
 48                                      CHAPTER 10
 49                                  PRODUCER LICENSING
                                                                        
 50        41-1001.  PURPOSE AND SCOPE. (1) This chapter governs  the  qualifications
 51    and  procedures  for  the  licensing of insurance producers. It simplifies and
                                                                        
                                           4
                                                                        
  1    organizes statutory language to improve efficiency, permits  the  use  of  new
  2    technology  and  reduces  costs associated with issuing and renewing insurance
  3    licenses.
  4        (2)  This chapter applies to adjusters to the extent provided  in  section
  5    41-1108,  Idaho  Code,  and to surplus lines brokers to the extent provided in
  6    sections 41-1223 and 41-1224, Idaho Code. Except where expressly made applica-
  7    ble, this chapter does not apply to title insurance under  chapter  27,  title
  8    41, Idaho Code.
                                                                        
  9        41-1002.  TERMS  CONSTRUED.  Wherever the terms "agent" or "broker" appear
 10    in title 41, Idaho Code, or in the rules of  the  department,  they  shall  be
 11    understood  and construed to mean "producer" as defined in section 41-1003(9),
 12    Idaho Code, except as used in section 41-1018, Idaho Code, and any other  sec-
 13    tions  where  it is apparent from the language that the terms should not be so
 14    construed.
                                                                        
 15        41-1003.  DEFINITIONS. (1) "Business entity" means a corporation, associa-
 16    tion, partnership, limited liability company, limited liability partnership or
 17    other legal entity.
 18        (2)  "Home state" means the District of Columbia and any state  or  terri-
 19    tory of the United States or any province of Canada in which an insurance pro-
 20    ducer  maintains his or her principal place of residence or principal place of
 21    business and is licensed to act as an insurance producer.
 22        (3)  "License" means a document issued by the director authorizing a  per-
 23    son  to  act  as an insurance producer for the lines of authority specified in
 24    the document. The license itself does not create any authority, actual, appar-
 25    ent or inherent, in the holder to represent or commit an insurance carrier.
 26        (4)  "Limited lines insurance" is insurance which restricts the  authority
 27    of  the  license to less than the total authority prescribed in the associated
 28    major lines pursuant to section 41-1008(1)(a) through  (g),  Idaho  Code,  and
 29    shall  include,  but not be limited to: credit life, credit disability, credit
 30    property, credit unemployment, involuntary unemployment, mortgage life,  mort-
 31    gage  guaranty,  mortgage  disability,  guaranteed automobile protection (GAP)
 32    insurance, transportation baggage insurance,  transportation  ticket  policies
 33    covering  personal  accident  insurance,  pet  insurance, or any other line of
 34    insurance that the director deems necessary to recognize for the  purposes  of
 35    complying with section 41-1009(5), Idaho Code.
 36        (5)  "Limited  lines producer" means a producer authorized by the director
 37    to sell, solicit or negotiate limited lines insurance.
 38        (6)  "Negotiate" means the act of conferring  directly  with  or  offering
 39    advice  directly  to a purchaser or prospective purchaser of a particular con-
 40    tract of insurance concerning any of the substantive benefits, terms or condi-
 41    tions of the contract, provided that the person  engaged  in  the  act  either
 42    sells insurance or obtains insurance from insurers for purchasers.
 43        (7)  "Person" means an individual or a business entity.
 44        (8)  "Producer"  means  a person required to be licensed under the laws of
 45    this state to sell, solicit or negotiate insurance.
 46        (9)  "Resident" means a person whose home state is Idaho or any other par-
 47    ticular state identified in conjunction with the use of the term.
 48        (10) "Sell" means to exchange a contract of insurance by  any  means,  for
 49    money or its equivalent, on behalf of an insurance company.
 50        (11) "Solicit"  means  attempting  to sell insurance or asking or urging a
 51    person to apply for a particular kind of insurance from a  particular  company
 52    or companies.
 53        (12) "Terminate"  means  the  cancellation  of the relationship between an
                                                                        
                                           5
                                                                        
  1    insurance producer and the insurer or the termination of a producer's  author-
  2    ity to transact insurance for or on behalf of an insurer.
  3        (13) "Uniform application" means the current version of the national asso-
  4    ciation of insurance commissioners (NAIC) uniform application for resident and
  5    nonresident producer licensing.
  6        (14) "Uniform  business  entity  application" means the current version of
  7    the NAIC uniform business entity  application  for  resident  and  nonresident
  8    business entities.
                                                                        
  9        41-1004.  LICENSE  REQUIRED. A person shall not sell, solicit or negotiate
 10    insurance in this state for any class or classes of insurance unless the  per-
 11    son  is  licensed  as a producer for that line of authority in accordance with
 12    this chapter.
                                                                        
 13        41-1005.  EXCEPTIONS TO LICENSING. (1) Nothing in this  chapter  shall  be
 14    construed  to  require  an insurer to obtain an insurance producer license. In
 15    this section, the term "insurer"  does  not  include  an  insurer's  officers,
 16    directors, employees, subsidiaries or affiliates.
 17        (2)  A  license as an insurance producer shall not be required of the fol-
 18    lowing:
 19        (a)  An officer, director or employee of an insurer  or  of  an  insurance
 20        producer, provided that the officer, director or employee does not receive
 21        any  commission  on  policies  written  or  sold to insure risks residing,
 22        located or to be performed in this state and:
 23             (i)   The activities of the officer, director or employee are  execu-
 24             tive, administrative, managerial, clerical or a combination of these,
 25             and are only indirectly related to the sale, solicitation or negotia-
 26             tion of insurance; or
 27             (ii)  The  function  of  the officer, director or employee relates to
 28             underwriting, loss control, inspection or the processing,  adjusting,
 29             investigating or settling of a claim on a contract of insurance; or
 30             (iii) The  officer, director or employee is acting in the capacity of
 31             a special agent or agency supervisor  assisting  insurance  producers
 32             where  the  person's  activities  are  limited to providing technical
 33             advice and assistance to licensed  insurance  producers  and  do  not
 34             include the sale, solicitation or negotiation of insurance;
 35        (b)  A  person  who  secures  and furnishes information for the purpose of
 36        group life insurance, group property and casualty insurance,  group  annu-
 37        ities,  group or blanket accident and health insurance, or for the purpose
 38        of enrolling individuals under plans, issuing certificates under plans  or
 39        otherwise  assisting  in  administering  plans, or performs administrative
 40        services relating to mass-marketed property and  casualty  insurance,  and
 41        who does not receive a commission;
 42        (c)  An  employer  or association or its officers, directors, employees or
 43        the trustees of an employee trust plan, to the extent that  the  employer,
 44        association,  officer,  employee,  director  or  trustee is engaged in the
 45        administration or operation of a program  of  employee  benefits  for  the
 46        employer's  or association's own employees or the employees of its subsid-
 47        iaries or affiliates, which involves the use of  insurance  issued  by  an
 48        insurer, as long as the employer, association, officer, director, employee
 49        or  trustee  is  not in any manner compensated, directly or indirectly, by
 50        the company issuing the contracts;
 51        (d)  Employees of insurers or organizations employed by insurers  who  are
 52        engaging  in  the inspection, rating or classification of risks, or in the
 53        supervision of the training of insurance producers, and who are not  indi-
                                                                        
                                           6
                                                                        
  1        vidually  engaged  in  the sale, solicitation or negotiation of insurance,
  2        and who do not receive a commission;
  3        (e)  A person whose activities in this state are  limited  to  advertising
  4        without   the intent to solicit insurance in this state through communica-
  5        tions in printed publications or other  forms  of  electronic  mass  media
  6        whose distribution is not limited to residents of the state, provided that
  7        the person does not sell, solicit or negotiate insurance that would insure
  8        risks residing, located or to be performed in this state;
  9        (f)  A  person  who is not a resident of this state who sells, solicits or
 10        negotiates a contract of insurance for commercial  property  and  casualty
 11        risks  to an insured with risks located in more than one (1) state insured
 12        under that contract, provided that the person is otherwise licensed as  an
 13        insurance  producer  to  sell,  solicit or negotiate that insurance in the
 14        state where the insured maintains its principal place of business and  the
 15        contract of insurance insures risks located in that state;
 16        (g)  A  salaried  full-time  employee  who  counsels or advises his or her
 17        employer relative to the insurance interests of the  employer  or  of  the
 18        subsidiaries  or  business  affiliates  of the employer, provided that the
 19        employee does not sell or solicit insurance or receive a commission; or
 20        (h)  A person who, concurrent with the rental of a motor vehicle, provides
 21        contract options to the standard rental agreement which provides auto  and
 22        travel  related  coverages  through  authorized  insurers  during a rental
 23        period not to exceed ninety (90) days.
                                                                        
 24        41-1006.  APPLICATION FOR EXAMINATION. (1) A resident individual  applying
 25    for  an  insurance  producer  license  shall pass a written examination unless
 26    exempt pursuant to section 41-1008(4), 41-1012,  41-1027(3) or  41-1028(2)(c),
 27    Idaho  Code.  The  examination shall test the knowledge of the individual con-
 28    cerning the lines of authority for which application is made, the  duties  and
 29    responsibilities  of an insurance producer and the insurance laws and rules of
 30    this state. Examinations required by this section shall be developed and  con-
 31    ducted under rules prescribed by the director of the department of insurance.
 32        (2)  Each  individual applying for an examination shall remit a nonrefund-
 33    able fee as promulgated by the director  pursuant  to  section  41-401,  Idaho
 34    Code.
 35        (3)  An individual who fails to appear for the examination as scheduled or
 36    who  fails  to pass the examination shall reapply for an examination and remit
 37    all required fees and forms before being rescheduled for another examination.
 38        (4)  Applications for licensure not received by the department within  one
 39    hundred  eighty  (180)  days  of  the successful completion of the examination
 40    shall be denied.
                                                                        
 41        41-1007.  APPLICATION FOR PRODUCER LICENSE. (1) A person  applying  for  a
 42    resident  insurance producer license shall make application to the director on
 43    the uniform application and declare under penalty of  refusal,  suspension  or
 44    revocation  of  the  license  that  the statements made in the application are
 45    true, correct and complete to  the  best  of  the  applicant's  knowledge  and
 46    belief.  Before  approving  the  application, the director shall find that the
 47    applicant:
 48        (a)  Is at least eighteen (18) years of age;
 49        (b)  Has submitted the applicant's fingerprints as may be required by  the
 50        director;
 51        (c)  Has  not committed any act that is a ground for denial, suspension or
 52        revocation of the license as set forth in title 41, Idaho Code;
 53        (d)  Has paid the fees prescribed by  the  director  pursuant  to  section
                                                                        
                                           7
                                                                        
  1        41-401, Idaho Code; and
  2        (e)  Has  successfully  passed the examinations for the lines of authority
  3        for which the applicant has applied.
  4        (2)  A business entity acting as an  insurance  producer  is  required  to
  5    obtain an insurance producer license. Application shall be made using the uni-
  6    form business entity application. Before approving the application, the direc-
  7    tor shall find that:
  8        (a)  The business entity has paid the fees prescribed by the director pur-
  9        suant to section 41-401, Idaho Code; and
 10        (b)  The  business  entity  has  designated a licensed producer, who is an
 11        individual responsible for  the  business  entity's  compliance  with  the
 12        insurance laws and rules of this state.
 13        (3)  The director may require any documents which are reasonably necessary
 14    to verify the information contained in an application.
 15        (4)  Each  insurer  that sells, solicits or negotiates any form of limited
 16    line insurance shall provide to each  individual  whose  duties  will  include
 17    selling,  soliciting  or  negotiating  limited  lines  insurance  a program of
 18    instruction that may be required to be approved by the director. If acceptable
 19    to the director, and as stated by rule, the  program  of  instruction  may  be
 20    administered in place of the examination as required in section 41-1006, Idaho
 21    Code.  In addition, such course of instruction may be administered in place of
 22    any continuing education requirements pursuant to section 41-1013, Idaho Code.
                                                                        
 23        41-1008.  PRODUCER LICENSE. (1) Unless denied licensure pursuant  to  sec-
 24    tion  41-1016,  Idaho  Code, persons who have met the requirements of sections
 25    41-1006 and 41-1007,  Idaho  Code,  shall  be  issued  an  insurance  producer
 26    license.  An insurance producer may receive qualification for a license in one
 27    (1) or more of the following lines of authority:
 28        (a)  Life insurance coverage on human lives, including benefits of  endow-
 29        ment  and  annuities,  benefits  in the event of death or dismemberment by
 30        accident, and benefits for disability income;
 31        (b)  Disability, including accident and health or sickness insurance  cov-
 32        erage  for  sickness,  bodily  injury or accidental death and benefits for
 33        disability income;
 34        (c)  Property insurance coverage for the direct or consequential  loss  or
 35        damage to property of every kind;
 36        (d)  Casualty  insurance  coverage against legal liability, including lia-
 37        bility for death, injury or disability or damage to real or personal prop-
 38        erty;
 39        (e)  Variable life and variable annuity products, meaning insurance cover-
 40        age provided under variable life insurance contracts  and  variable  annu-
 41        ities;
 42        (f)  Personal lines, meaning property and casualty insurance coverage sold
 43        to individuals and families for primarily noncommercial purposes;
 44        (g)  Any other line of insurance permitted under state laws or rules.
 45        (2)  An  insurance  producer license shall remain in effect unless revoked
 46    or suspended as long as the renewal fee promulgated by the  director  pursuant
 47    to  section  41-401, Idaho Code, is paid and the continuing education require-
 48    ments for resident insurance producers are  met  in  accordance  with  section
 49    41-1013, Idaho Code.
 50        (3)  An  individual  insurance  producer  who allows his or her license to
 51    lapse may, within twelve (12) months from the due date  of  the  renewal  fee,
 52    reinstate  the  same  license without passing a written examination unless the
 53    licensee would otherwise be required to retest under section 41-1013(7), Idaho
 54    Code. However, a penalty in the amount of double the unpaid renewal fee  shall
                                                                        
                                           8
                                                                        
  1    be required for any renewal fee received after the due date.
  2        (4)  A  licensed  insurance  producer who is unable to comply with license
  3    renewal procedures due to military service or some other  extenuating  circum-
  4    stance,  such as a long-term medical disability, may request that the director
  5    waive those procedures. The producer may also request a waiver of any examina-
  6    tion requirement or any other fine or sanction imposed for failure  to  comply
  7    with renewal procedures.
  8        (5)  The  license  shall  contain  the  licensee's name, address, personal
  9    identification number, the date of issuance, the lines of authority, the expi-
 10    ration date and any other information the director deems necessary.
 11        (6)  Licensees shall inform the director by any means  acceptable  to  the
 12    director of a change of address within thirty (30) days of the change. A busi-
 13    ness  entity  licensed  as  a  producer shall inform the director by any means
 14    acceptable to the director of any change in ownership, officers, directors  or
 15    the  designated  licensed producer responsible for compliance pursuant to sec-
 16    tion 41-1007(2)(b), Idaho Code.
 17        (7)  In order to assist in the performance of the director's  duties,  the
 18    director  may  contract  with nongovernmental entities, including the national
 19    association of insurance commissioners or its affiliates or  subsidiaries,  to
 20    perform any ministerial functions related to producer licensing, including the
 21    collection  of fees, that the director and the nongovernmental entity may deem
 22    appropriate.
                                                                        
 23        41-1009.  NONRESIDENT PRODUCER LICENSE. (1) Unless denied licensure pursu-
 24    ant to section 41-1016, Idaho Code, a nonresident applicant  shall  receive  a
 25    nonresident producer license if:
 26        (a)  The  applicant is currently licensed as a resident and in good stand-
 27        ing in his or her home state;
 28        (b)  The applicant has submitted the proper request for licensure and  has
 29        paid the fees set forth by rule pursuant to section 41-401, Idaho Code;
 30        (c)  The applicant has submitted or transmitted to the director the appli-
 31        cation for licensure that the applicant submitted to his or her home state
 32        or, in lieu of such application, a completed uniform application;
 33        (d)  The applicant has submitted the applicant's fingerprints, if required
 34        by the director, on a form as prescribed by the director; and
 35        (e)  The  applicant's  home  state awards nonresident producer licenses to
 36        residents of this state on the same basis.
 37        (2)  The director may verify the producer's licensing status  through  the
 38    producer  database maintained by the national association of insurance commis-
 39    sioners, its affiliates or subsidiaries, or by any other acceptable means.
 40        (3)  A nonresident producer who moves from one state to another state or a
 41    resident producer who moves from this state to  another  state  shall  file  a
 42    change of address and provide certification from the new resident state within
 43    thirty  (30) days of the change of legal residence. No fee or license applica-
 44    tion shall be required for filing the change of address.
 45        (4)  Notwithstanding  any  other  provision  of  this  chapter,  a  person
 46    licensed as a surplus lines broker in his or her home state  shall  receive  a
 47    nonresident  surplus  lines  broker license pursuant to subsection (1) of this
 48    section. Except as to subsection (1) of this section, nothing in this  section
 49    otherwise amends or supersedes any provision of section 41-1223, Idaho Code.
 50        (5)  Notwithstanding  any  other  provision  of  this  chapter,  a  person
 51    licensed as a limited lines producer in his or her home state shall receive  a
 52    nonresident limited lines producer license, pursuant to subsection (1) of this
 53    section,  granting  the  same  scope of authority as granted under the license
 54    issued by the producer's home state. For the purposes of this subsection, lim-
                                                                        
                                           9
                                                                        
  1    ited lines insurance  is  any  authority  granted  by  the  home  state  which
  2    restricts  the  authority of the license to less than the total authority pre-
  3    scribed in the  associated  major  lines  pursuant  to  section  41-1008(1)(a)
  4    through (g), Idaho Code.
                                                                        
  5        41-1010.  NONRESIDENT  PRODUCERS  --  SERVICE  OF PROCESS. (1) Each person
  6    applying to be a nonresident producer shall,  on  a  form  prescribed  by  the
  7    director,  appoint the director as his agent for purposes of receiving service
  8    of legal process issued against the producer in  this  state  upon  causes  of
  9    action  arising  within this state out of transactions under the license. Ser-
 10    vice upon the director as an agent shall constitute  effective  legal  service
 11    upon the producer.
 12        (2)  The  appointment  shall  be irrevocable for as long as there could be
 13    any cause of action against the licensee arising out of his insurance transac-
 14    tions in or with respect to this state.
 15        (3)  Duplicate copies of such legal process against the licensee shall  be
 16    served  upon  the  director  by a person competent to serve a summons.  At the
 17    time of service the plaintiff shall pay the director an appropriate fee to  be
 18    determined by rule and not exceeding thirty dollars ($30.00).
 19        (4)  Upon  receiving such service, the director shall send one (1) copy of
 20    the process by registered or certified mail with return receipt  requested  to
 21    the defendant licensee at his last address of record with the director.
 22        (5)  The  director shall keep a record of the day and hour of such service
 23    upon him. No proceedings shall be brought against the producer, and  the  pro-
 24    ducer shall not be required to appear, plead or answer until the expiration of
 25    thirty (30) days after the date of service upon the director.
                                                                        
 26        41-1011.  ISSUANCE  -- REFUSAL OF LICENSE. If after completion of applica-
 27    tion for a license, the taking and passing of any examination  required  under
 28    this  chapter  and,  if required by the director, receipt of a report from the
 29    federal bureau of investigation based on the fingerprints  of  the  applicant,
 30    the  director  finds  that  the applicant has fully met the requirements for a
 31    license, the director shall issue the license to the applicant; otherwise, the
 32    director shall refuse to issue the  license  and  shall  promptly  notify  the
 33    applicant and any appointing insurer or insurers of such refusal and state the
 34    grounds  for  the  refusal. Pending the receipt of the report from the federal
 35    bureau of investigation, the director may, in his discretion, issue  a  tempo-
 36    rary license if all other qualifications have been met.
                                                                        
 37        41-1012.  EXEMPTION FROM EXAMINATION. (1) An individual who applies for an
 38    insurance  producer license in  this state and who was previously licensed for
 39    the same lines of authority in another state shall not be required to complete
 40    any prelicensing examination if:
 41        (a)  The person is currently licensed in another state; or
 42        (b)  The application is received within ninety (90) days of the  cancella-
 43        tion of the applicant's previous license and the prior state issues a cer-
 44        tification that:
 45             (i)   At the time of cancellation, the applicant was in good standing
 46             in that state; or
 47             (ii)  The  state's  producer  database  records, as maintained by the
 48             national association of insurance commissioners or its affiliates  or
 49             subsidiaries,  indicate  that the producer is or was licensed in good
 50             standing for the lines of authority requested.
 51        (2)  A person licensed as an insurance producer in another state who moves
 52    to this state shall make application within ninety (90) days  of  establishing
                                                                        
                                           10
                                                                        
  1    legal  residence  to  become  a resident licensee pursuant to section 41-1006,
  2    Idaho Code. No examination shall be required of that person to obtain any line
  3    of authority previously held in the prior state unless the  director  provides
  4    otherwise by rule.
                                                                        
  5        41-1013.  CONTINUATION  --  EXPIRATION OF LICENSES -- CONTINUING EDUCATION
  6    STATEMENT. (1) All producer, adjuster, and surplus line broker licenses issued
  7    under this code shall continue in force until expired, suspended,  revoked  or
  8    otherwise terminated, subject to payment of the applicable continuation fee on
  9    or  before  the expiration date referred to in subsection (2) of this section,
 10    accompanied by a written request for such continuation and a continuing educa-
 11    tion statement verifying that the licensee has completed any continuing educa-
 12    tion requirements imposed by the director. An application for renewal  is  not
 13    complete unless it is submitted with both the applicable fee and the completed
 14    continuing  education  statement.  Requests  for continuation shall be made in
 15    writing on forms to be prescribed by the director.
 16        (2)  The director may fix the dates of expiration  for  licenses  in  such
 17    manner  as  is  deemed by him to be advisable for an efficient distribution of
 18    the workload of his office. If the expiration date for a particular license or
 19    appointment would shorten the period for which the license or appointment con-
 20    tinuation fee has been paid, no refund of an unearned fee shall  be  made.  If
 21    the expiration date for a particular license or appointment would lengthen the
 22    period  for which a license or appointment continuation fee has been paid, the
 23    director shall charge no additional fee for such lengthened period.
 24        (3)  Any license referred to in subsection (1) of this section  for  which
 25    no  request for continuation, fee and completed continuing education statement
 26    are timely received by the director shall be deemed to have  expired  at  mid-
 27    night on the applicable expiration date.
 28        (4)  All sums tendered as fees for continuations of licenses as producer,
 29    limited lines producer, adjuster or surplus line broker shall be deemed earned
 30    when  paid  and shall not be subject to refund, except that the director shall
 31    refund any duplicate payment of fees.
 32        (5)  For the protection of the people of this  state  the  director  shall
 33    establish,  by  rule, additional educational requirements designed to maintain
 34    and improve the insurance skills and knowledge  of  resident  producers  after
 35    licensure  by  the department of insurance. The director shall also establish,
 36    by rule, an advisory committee comprised of representatives from each  segment
 37    of  the  insurance  industry  to assist the director in prescribing additional
 38    educational requirements. Such rules promulgated by the director shall include
 39    limits on the terms of service for members of the committee.
 40        (6)  Subject to subsection (3) of this section,  the  director  shall  not
 41    permit to be continued the license of any producer who is licensed pursuant to
 42    section 41-1007, Idaho Code, who is a resident of this state, unless such per-
 43    son  has  demonstrated to the satisfaction of the director that in addition to
 44    meeting the standards contained in sections 41-1007, (qualifications for  pro-
 45    ducer  license),  Idaho  Code, as may be applicable, all the additional educa-
 46    tional requirements as the director may prescribe by rule have been met.
 47        (7)  Failure of the licensee to comply with any applicable additional edu-
 48    cation requirements prescribed by the director by rule by the expiration  date
 49    of  the  license  shall  be grounds for the director to refuse to continue any
 50    such license. The licensee may reinstate his  or  her  license  by  submitting
 51    proof  of  all education requirements within ninety (90) days from the date of
 52    expiration of the license and by submitting an additional administrative  pen-
 53    alty  of one hundred dollars ($100) for a delinquency of one (1) day to thirty
 54    (30) days, two hundred dollars ($200) for a  delinquency  of  thirty-one  (31)
                                                                        
                                           11
                                                                        
  1    days to sixty (60) days, and three hundred dollars ($300) for a delinquency of
  2    sixty-one  (61) days to ninety (90) days. Following the ninetieth day from the
  3    date of nonrenewal of the license and up to one (1) year from  the  nonrenewal
  4    date,  the  licensee  must  complete  all requirements for licensure including
  5    retesting, submission of a new application and payment of  all  new  licensing
  6    fees.  In  addition,  the  individual  must  submit proof of completion of the
  7    required education requirements for the licensing period in which the  license
  8    was  terminated.  After the license has been expired for one (1) year or more,
  9    the individual must reapply and retest as a new applicant.
                                                                        
 10        41-1014.  ASSUMED NAMES. An insurance producer doing  business  under  any
 11    name  other  than the producer's legal name is required to notify the director
 12    in writing prior to using  the assumed name.
                                                                        
 13        41-1015.  TEMPORARY LICENSING. (1) The  director  may  issue  a  temporary
 14    insurance producer license for a period not to exceed one hundred eighty (180)
 15    days without requiring an examination if the director deems that the temporary
 16    license is necessary for the servicing of an insurance business in the follow-
 17    ing cases:
 18        (a)  To the surviving spouse or court-appointed personal representative of
 19        a  licensed  insurance producer who dies or becomes mentally or physically
 20        disabled in order to allow adequate time for the  sale  of  the  insurance
 21        business  owned  by the producer or for the recovery or return of the pro-
 22        ducer to the business or to provide for the training and licensing of  new
 23        personnel to operate the producer's business;
 24        (b)  To a member or employee of a business entity licensed as an insurance
 25        producer  upon  the death or disability of an individual designated in the
 26        business entity application or the license;
 27        (c)  To the designee of a licensed insurance producer entering active ser-
 28        vice in the armed forces of the United States of America; or
 29        (d)  Pursuant to section 41-1011, Idaho Code, or in any other circumstance
 30        where the director deems the public interest will best be  served  by  the
 31        issuance of the temporary license.
 32        (2)  The director may by order limit the authority of any temporary licen-
 33    see in any way deemed necessary to protect insureds and the public. The direc-
 34    tor  may  require  the  temporary licensee to have a suitable sponsor who is a
 35    licensed producer or insurer and who assumes responsibility for all actions of
 36    the temporary licensee, and may impose other similar requirements designed  to
 37    protect  insureds and the public. The director may by order revoke a temporary
 38    license, without the right to a prior hearing, if the interests of insureds or
 39    the public are endangered. A temporary license  may  not  continue  after  the
 40    owner or the personal representative disposes of the business.
                                                                        
 41        41-1016.  ADMINISTRATIVE  PENALTY  --  SUSPENSION,  REVOCATION, REFUSAL OF
 42    LICENSE. (1) The director may impose an administrative penalty not  to  exceed
 43    one thousand dollars ($1,000), for deposit in the general fund of the state of
 44    Idaho,  and  may suspend for not more than twelve (12) months or may revoke or
 45    refuse to issue or continue any license issued under this chapter, chapter 27,
 46    title 41, Idaho Code (title insurance),  chapter  11,  title  41,  Idaho  Code
 47    (adjusters),  or  any surplus lines broker license if, after a hearing held on
 48    not less than twenty (20) days' notice of such  hearing  and  of  the  charges
 49    against  the  licensee  given as provided in section 41-212(3), Idaho Code, to
 50    the licensee and to any appointing insurers represented (as to a producer  who
 51    is  appointed as an agent), the director finds that as to the licensee any one
 52    (1) or more of the following causes or violations exist:
                                                                        
                                           12
                                                                        
  1        (a)  Providing incorrect,  misleading,  incomplete  or  materially  untrue
  2        information in the license application;
  3        (b)  Violating  any  provision  of  title 41, Idaho Code, department rule,
  4        subpoena or order of the director or of another state's  insurance  direc-
  5        tor;
  6        (c)  Obtaining or attempting to obtain a license through misrepresentation
  7        or fraud;
  8        (d)  Improperly withholding, misappropriating or converting any moneys or
  9        properties received in the course of doing insurance business;
 10        (e)  Misrepresenting the terms of an actual or proposed insurance contract
 11        or  application  for insurance or misrepresenting any fact material to any
 12        insurance transaction or proposed transaction;
 13        (f)  Being convicted of or pleading guilty to any felony, or to  a  misde-
 14        meanor  which  evidences bad moral character, dishonesty, a lack of integ-
 15        rity and financial responsibility, or an unfitness and inability  to  pro-
 16        vide acceptable service to the consuming public;
 17        (g)  Admitting or being found to have committed any insurance unfair trade
 18        practice or fraud;
 19        (h)  Using  fraudulent,  coercive or dishonest practices, or demonstrating
 20        incompetence, untrustworthiness or financial irresponsibility, or being  a
 21        source of injury and loss to the public or others, in the conduct of busi-
 22        ness in this state or elsewhere;
 23        (i)  Having an insurance license denied, suspended or revoked in any other
 24        state, province, district or territory;
 25        (j)  Forging another's name on an application for insurance or on any doc-
 26        ument related to an insurance transaction;
 27        (k)  Improperly using notes or any other reference material to complete an
 28        examination for an insurance license;
 29        (l)  Knowingly  accepting insurance business from an individual who is not
 30        licensed;
 31        (m)  Failing to comply with an administrative or court  order  imposing  a
 32        child support obligation, provided however, that nothing in this provision
 33        shall be deemed to abrogate or modify chapter 14, title 7, Idaho Code; or
 34        (n)  Failing  to pay state income tax or to comply with any administrative
 35        or court order directing payment of state income tax.
 36        (2)  The director shall, without hearing, suspend for not more than twelve
 37    (12) months, or shall revoke or refuse to continue any  license  issued  under
 38    this chapter to a nonresident where the director has received a final order of
 39    suspension,  revocation  or  refusal to continue from the insurance regulatory
 40    official or court of jurisdiction of the licensee's home state. If cause under
 41    this provision exists after the expiration of the twelve (12) months,  succes-
 42    sive suspensions may be imposed by the director without hearing.
 43        (3)  In the event that the director denies or refuses to renew an applica-
 44    tion  for  a  license, the director shall notify the applicant or licensee and
 45    advise, in writing, the applicant or licensee of the reason for the denial  or
 46    nonrenewal of the applicant's or licensee's license. The applicant or licensee
 47    may  make  written  demand upon the director within twenty-one (21) days for a
 48    hearing before the director to determine the reasonableness of the  director's
 49    action. The hearing shall be held pursuant to chapter 2, title 41, and chapter
 50    52, title 67, Idaho Code.
 51        (4)  The license of a business entity may be suspended, revoked or refused
 52    if  the  director  finds,  after  hearing, that the violation of an individual
 53    licensee, who is registered to or acting on behalf of the business entity, was
 54    known or should have been known by one (1) or more of the owners, officers  or
 55    managers  acting  on  behalf of the business entity and that the violation was
                                                                        
                                           13
                                                                        
  1    not reported to the director and no corrective action was taken.
  2        (5)  In addition to or in lieu of any  applicable  denial,  suspension  or
  3    revocation  of  a  license, a person may, after hearing, be subject to a civil
  4    fine or administrative penalty pursuant to subsection (1) of this  section  or
  5    any other applicable section.
  6        (6)  The  director shall retain the authority to enforce the provisions of
  7    and impose any penalty or remedy authorized by title 41, Idaho  Code,  against
  8    any person who is under investigation for or charged with a violation of title
  9    41,  Idaho Code, or department rule, even if the person's license or registra-
 10    tion has been surrendered, has lapsed by operation of law, or  if  the  person
 11    has never been licensed.
                                                                        
 12        41-1017.  COMMISSIONS.  (1)  An  insurance  company  or insurance producer
 13    shall not pay a commission, service fee or other valuable consideration  to  a
 14    person  for selling, soliciting or negotiating insurance in this state if that
 15    person is not duly licensed as required under this chapter.
 16        (2)  A person shall not accept a commission, service fee or other valuable
 17    consideration for selling, soliciting or negotiating insurance in  this  state
 18    if that person is not duly licensed as required under this chapter.
 19        (3)  Renewals  or  other  deferred commissions may be paid to a person for
 20    selling, soliciting or negotiating insurance in this state if that person  was
 21    duly  licensed as required under this chapter at the time of the sale, solici-
 22    tation or negotiation.
 23        (4)  An insurer or insurance producer may pay or assign commissions,  ser-
 24    vice fees or other valuable consideration to any person, regardless of whether
 25    that  person is licensed as a producer, unless the payment or assignment would
 26    violate a specific section of title 41, Idaho Code, including, but not limited
 27    to, sections 41-1314 and 41-2708, Idaho Code, or department rule.
                                                                        
 28        41-1018.  APPOINTMENTS. (1) An insurance producer  shall  not  act  as  an
 29    agent  of  an insurer unless the insurance producer becomes an appointed agent
 30    of that insurer. An insurance producer who is not acting as  an  agent  of  an
 31    insurer is not required to become appointed.
 32        (2)  To  appoint  a  producer  as  its agent, the appointing insurer shall
 33    file, in a format approved by the director, a  notice  of  appointment  within
 34    fifteen  (15)  days from the date the agency contract is executed or the first
 35    insurance application is submitted.
 36        (3)  Upon receipt of the notice of appointment, the director shall verify,
 37    within a reasonable time not to exceed thirty (30) days,  that  the  insurance
 38    producer  is eligible for appointment. If the insurance producer is determined
 39    to be ineligible for appointment, the director shall notify the insurer within
 40    five (5) days of his determination.
                                                                        
 41        41-1019.  NOTIFICATION TO DIRECTOR  OF  TERMINATION.  (1)  An  insurer  or
 42    authorized  representative  of  the  insurer  that terminates the appointment,
 43    employment,  contract or other insurance business relationship with a producer
 44    shall notify the director within thirty (30) days following the effective date
 45    of the termination, using a format prescribed by the director, if  the  reason
 46    for  termination  is  one  of  the reasons set forth in section 41-1016, Idaho
 47    Code, or the insurer has knowledge that the producer was  found  by  a  court,
 48    governmental  body  or  self-regulatory organization authorized by law to have
 49    engaged in any of the activities set forth in  section  41-1016,  Idaho  Code.
 50    Upon the written request of the director, the insurer shall provide additional
 51    information, documents, records or other data pertaining to the termination or
 52    activity of the producer.
                                                                        
                                           14
                                                                        
  1        (2)  An  insurer  or  authorized representative of the insurer that termi-
  2    nates the appointment, employment, contract or other insurance business  rela-
  3    tionship  with  a  producer  for  any reason not set forth in section 41-1016,
  4    Idaho Code, shall notify the director within thirty (30)  days  following  the
  5    effective  date of the termination, using a format prescribed by the director.
  6    Upon written request of the director, the  insurer  shall  provide  additional
  7    information, documents, records or other data pertaining to the termination.
  8        (3)  The  insurer  or  authorized  representative  of  the  insurer  shall
  9    promptly  notify  the director in a format acceptable to the director if, upon
 10    further review or investigation, the insurer discovers additional  information
 11    that  would have been reportable to the director in accordance with subsection
 12    (1) of this section.
 13        (4)  A copy of any notification shall be provided to the producer as  fol-
 14    lows:
 15        (a)  Within  fifteen  (15)  days after making the notification required by
 16        subsections (1), (2) and (3) of this section, the  insurer  shall  mail  a
 17        copy of the notification to the producer at his or her last known address.
 18        If  the  producer  is terminated for cause for any other reasons listed in
 19        section 41-1016, Idaho Code, the insurer shall provide a copy of the noti-
 20        fication to the producer at his or her last  known  address  by  certified
 21        mail,  return  receipt requested, postage prepaid or by overnight delivery
 22        using a nationally recognized carrier.
 23        (b)  Within thirty (30) days after the producer has received the  original
 24        or  additional  notification,  the producer may file written comments con-
 25        cerning the substance of the notification with the director. The  producer
 26        shall,  by  the  same means, simultaneously send a copy of the comments to
 27        the reporting insurer, and  the  comments  shall  become  a  part  of  the
 28        director's  file and shall accompany every copy of a report distributed or
 29        disclosed for any reason about the producer as permitted under  subsection
 30        (6) of this section.
 31        (5)  Immunities.
 32        (a)  In the absence of actual malice, an insurer, the authorized represen-
 33        tative  of  the  insurer,  a producer, the director, or an organization of
 34        which the director is a member and that compiles information and makes  it
 35        available  to  other  insurance directors or regulatory or law enforcement
 36        agencies, shall not be subject to civil liability, and a  civil  cause  of
 37        action  of  any  nature  shall  not  arise against these entities or their
 38        respective agents or employees as a result of any statement or information
 39        required by or provided pursuant to this section or any information relat-
 40        ing to any statement that may be requested in writing by the director from
 41        an insurer or producer or as a result of any statement  by  a  terminating
 42        insurer  or  producer  to an insurer or producer limited solely and exclu-
 43        sively to whether a termination for cause under  subsection  (1)  of  this
 44        section  was  reported to the director, provided that the propriety of any
 45        termination for cause under subsection (1) of this section is certified in
 46        writing by an officer or authorized representative of the insurer or  pro-
 47        ducer terminating the relationship.
 48        (b)  In  any  action brought against a person that may have immunity under
 49        paragraph (a) of this subsection for making any statement required by this
 50        section or providing any information relating to any statement that may be
 51        requested by the director, the party bringing the action shall plead  spe-
 52        cifically in any allegation that paragraph (a) of this subsection does not
 53        apply because the person making the statement or providing the information
 54        did so with actual malice.
 55        (c)  Paragraph  (a) or (b) of this subsection shall not abrogate or modify
                                                                        
                                           15
                                                                        
  1        any existing statutory or common law privileges or immunities.
  2        (6)  Confidentiality.
  3        (a)  Any documents, materials or other information obtained by the  direc-
  4        tor in an investigation pursuant to this section shall be exempt from pub-
  5        lic disclosure under chapter 3, title 9, Idaho Code.
  6        (b)  In  order to assist in the performance of the director's duties under
  7        this chapter, the director:
  8             (i)   May share documents, materials or other information,  including
  9             confidential  and  privileged  documents and materials or information
 10             subject to paragraph (a) of this subsection, with other  state,  fed-
 11             eral  and  international  regulatory  agencies  and  law  enforcement
 12             authorities,  and  with the national association of insurance commis-
 13             sioners, its affiliates or subsidiaries, provided that the  recipient
 14             agrees  to  maintain the confidentiality and privileged status of the
 15             documents, materials or other information;
 16             (ii)  May receive  documents,  materials  or  information,  including
 17             otherwise  confidential and privileged documents, materials or infor-
 18             mation, from the national association of insurance commissioners, its
 19             affiliates or subsidiaries  and  from  regulatory  agencies  and  law
 20             enforcement  authorities  of other foreign or domestic jurisdictions,
 21             and shall maintain as confidential or privileged any documents, mate-
 22             rials or information received with notice or with  the  understanding
 23             that they are confidential or privileged under the laws of the juris-
 24             diction  that  is  the source of the documents, materials or informa-
 25             tion; and
 26             (iii) May enter into agreements governing sharing and use of informa-
 27             tion consistent with this subsection.
 28        (c)  No waiver of any applicable privilege or claim of confidentiality  in
 29        the documents, materials or information shall occur as a result of disclo-
 30        sure  to  the  director  under  this  section or as a result of sharing as
 31        authorized in paragraph (b) of this subsection.
 32        (d)  Nothing in this chapter shall prohibit the  director  from  releasing
 33        final  adjudicated actions, including for cause terminations that are open
 34        to public inspection pursuant to chapter 3, title 9 and  title  41,  Idaho
 35        Code,  to  a  database  or  other  clearinghouse service maintained by the
 36        national association of insurance commissioners or its affiliates or  sub-
 37        sidiaries.
 38        (7)  Penalties for failing to report. An insurer, the authorized represen-
 39    tative of the insurer, or a producer who fails to report as required under the
 40    provisions  of  this section or who is found by a court of competent jurisdic-
 41    tion to have reported with actual malice may, after notice and  hearing,  have
 42    his  license or certificate of authority suspended or revoked and may be fined
 43    in accordance with section 41-1016 or 41-327, Idaho Code.
                                                                        
 44        41-1020.  RECIPROCITY. (1) The  director  shall  waive  any  requirements,
 45    except the requirements imposed by section 41-1009, Idaho Code, for a nonresi-
 46    dent  producer  license  applicant  with  a valid license from his or her home
 47    state if the applicant's home state awards nonresident licenses  to  residents
 48    of this state on the same basis.
 49        (2)  A nonresident producer's satisfaction of his or her home state's con-
 50    tinuing  education requirements for licensed insurance producers shall consti-
 51    tute satisfaction of this state's continuing  education  requirements  if  the
 52    nonresident  producer's home state recognizes the satisfaction of its continu-
 53    ing  education requirements imposed upon producers from this state on the same
 54    basis.
                                                                        
                                           16
                                                                        
  1        41-1021.  REPORTING OF ACTIONS. (1) A producer shall report to the  direc-
  2    tor  any administrative action taken against the producer in another jurisdic-
  3    tion or by another governmental agency within thirty (30) days  of  the  final
  4    disposition of the matter. This report shall include a copy of the order, con-
  5    sent order or other relevant legal documents.
  6        (2)  Within  thirty (30) days of the initial pretrial hearing date, a pro-
  7    ducer shall report to the director any criminal prosecution  of  the  producer
  8    taken in any jurisdiction. The report shall include a copy of the initial com-
  9    plaint  filed,  the  order  resulting  from the hearing and any other relevant
 10    legal documents.
                                                                        
 11        41-1022.  INSURERS MUST ACCEPT BUSINESS THROUGH LICENSED  PRODUCERS  ONLY.
 12    (1)  No authorized insurer shall make, write, place or cause to be made, writ-
 13    ten or placed in this state any policy, duplicate policy,  or  insurance  con-
 14    tract of any kind, covering  a subject of insurance resident, located or to be
 15    performed  in this state through any person who is not then licensed as a pro-
 16    ducer under this chapter.
 17        (2)  The director may penalize,  suspend  or  revoke  the  certificate  of
 18    authority  of  any  insurer  violating this section in accordance with section
 19    41-327(1), Idaho Code.
                                                                        
 20        41-1023.  COUNTERSIGNATURE OF POLICIES -- POWER OF ATTORNEY. (1) When  the
 21    signature  or  countersignature of a property or casualty producer is required
 22    on an insurance contract, or rider or endorsement thereto, the producer shall,
 23    except as provided in section 41-337(1), Idaho Code,  and  subsection  (2)  of
 24    this section, affix his original written signature thereon.
 25        (2)  The  property  or  casualty producer may grant a power of attorney in
 26    writing to an individual who is twenty-one (21) years of age or older,  autho-
 27    rizing  such  person to countersign or cause a facsimile of the agent's signa-
 28    ture to be placed on policies and endorsements in his name and on his  behalf.
 29    The  power  of attorney shall be acknowledged by the agent under oath before a
 30    notary public and shall be kept on file in the agent's office.
                                                                        
 31        41-1024.  REPORTING AND ACCOUNTING  FOR  PREMIUMS.  (1)  All  premiums  or
 32    return  premiums  received  by a producer shall be trust funds received by the
 33    producer in a fiduciary capacity, and the producer shall,  in  the  applicable
 34    regular  course  of  business,  account  for  and pay the same to the insured,
 35    insurer or producer entitled to the funds. If the producer establishes a sepa-
 36    rate deposit for funds belonging to others in order to avoid a commingling  of
 37    such  fiduciary funds with his own funds, he may deposit and commingle in such
 38    separate deposit all funds belonging to others so long as the amount  of  such
 39    deposit  so  held  for  all other persons is reasonably ascertainable from the
 40    records and accounts of the producer.
 41        (2)  Any producer who, not being lawfully  entitled  thereto,  diverts  or
 42    appropriates  to  his  own  use  such  trust or fiduciary funds or any portion
 43    thereof, whether or not such funds have been separately deposited, shall  upon
 44    conviction be guilty of a felony.
                                                                        
 45        41-1025.  RULES.  The  director  may,  in  accordance with section 41-211,
 46    Idaho Code, promulgate reasonable rules as are necessary or  proper  to  carry
 47    out the purposes of this chapter.
                                                                        
 48        41-1026.  PROCEDURE FOLLOWING SUSPENSION, REVOCATION -- REINSTATEMENT. (1)
 49    Upon  suspension, revocation, or refusal to continue any license, the director
 50    shall notify the licensee as provided in section 41-212(3), Idaho  Code,  and,
                                                                        
                                           17
                                                                        
  1    in  the  case  of  a producer who holds appointments from insurers, shall give
  2    like notice to the insurers represented.
  3        (2)  Suspension, revocation, or refusal of any one (1) license held by the
  4    licensee under title 41, Idaho Code, shall automatically  suspend,  revoke  or
  5    refuse continuation of all other licenses held by the licensee under title 41,
  6    Idaho Code.
  7        (3)  The director shall not issue a license under title 41, Idaho Code, to
  8    or  as  to  any  person  whose license has been revoked or continuance refused
  9    until after the expiration of one (1) year from the date of such revocation or
 10    refusal or, if judicial review of such revocation or refusal is sought, within
 11    one (1) year from the date of a final court  order  or  decree  affirming  the
 12    revocation  or refusal. In the event the former licensee again files an appli-
 13    cation for a license under title 41, Idaho Code, the director may require  the
 14    applicant  to  show good cause why the prior revocation or refusal to continue
 15    his license shall not be deemed a bar to the issuance of a new license.
                                                                        
 16        41-1027.  RETURN OF LICENSE. (1) All licenses, although issued and  deliv-
 17    ered  as  to the licensee producer, adjuster or surplus lines broker, shall at
 18    all times be the property of the state of Idaho. Upon any expiration, termina-
 19    tion, suspension or revocation of the license, the licensee  or  other  person
 20    having  possession  or custody of the license shall deliver it to the director
 21    either by personal delivery or by mail.
 22        (2)  In the case of any license that is lost, stolen or destroyed while in
 23    the possession of a licensee or other person, the director may, in lieu of the
 24    return of the license, accept the affidavits of the licensee or  other  person
 25    responsible  for or involved in the safekeeping of such license concerning the
 26    facts of the loss, theft or destruction.
                                                                        
 27        41-1028.  INACTIVE STATUS. (1) Any individual producer who does  not  want
 28    to  actively continue in the business of insurance may apply for inactive sta-
 29    tus of his license on forms prescribed by the director. The director,  in  his
 30    discretion,  may  grant  or deny the application for inactive status and shall
 31    notify the licensee of this decision in writing. Inactive status of a license,
 32    once granted, shall apply to all licenses held by the licensee and shall  con-
 33    tinue in force until reactivated pursuant to this section or until the license
 34    is suspended or revoked pursuant to this chapter.
 35        (2)  During  the  period  that  a licensee remains on inactive status, the
 36    licensee may not transact the business of insurance in this state or engage in
 37    any other insurance activity which requires an active license. A  licensee  on
 38    inactive  status  may,  subject to the terms of an insurer's contract with the
 39    licensee, continue to receive commissions or other  compensation  relative  to
 40    business written by such licensee during active license status.
 41        (3)  Any  individual  producer  whose license is placed on inactive status
 42    shall be exempt from compliance with continuing education requirements.
 43        (4)  An individual producer whose license is  placed  on  inactive  status
 44    shall be subject to payment of the applicable continuation fees.
 45        (5)  An  individual producer whose license is on inactive status may apply
 46    for reactivation of a license on forms prescribed by the director. The request
 47    for reactivation shall include proof of completion of  twenty  (20)  hours  of
 48    continuing   education   earned   during  the  twelve  (12)  months  prior  to
 49    reactivation or proof that the producer has retested and met  the  examination
 50    requirements  as  to  any line or kind of insurance to be transacted under the
 51    reactivated license. The director, in his discretion, may grant  or  deny  the
 52    application for reactivation.
                                                                        
                                           18
                                                                        
  1        41-1029.  SEVERABILITY.  If  any provision of this chapter or its applica-
  2    tion to any person or circumstance is held invalid, the  invalidity  does  not
  3    affect  other  provisions  or  applications of this chapter which can be given
  4    effect without the invalid provision or application, and to this end the  pro-
  5    visions of this chapter are severable.
                                                                        
  6        SECTION  4.  That  Section 41-1108, Idaho Code, be, and the same is hereby
  7    amended to read as follows:
                                                                        
  8        41-1108.  OTHER PROVISIONS APPLICABLE. The following sections  of  chapter
  9    10, title 41, Idaho Code, shall, to the extent so applicable, also apply as to
 10    adjuster licenses:
 11        (1)  41-10307(51)  (misrepresentations,  etc.  in  application  -- penalty
 12    (application for producer license).
 13        (2)  41-1008 (producer license).
 14        (3)  41-104311 (issuance, refusal of license).
 15        (34)  41-104613 (continuation, expiration of license, continuing education
 16    statement).
 17        (4)  41-1076 (change of address).
 18        (5)  41-107716 (administrative penalty -- suspension, revocation,  refusal
 19    of license).
 20        (6)  41-107833  (procedure  following suspension, revocation -- reinstate-
 21    ment).
 22        (7)  41-107934 (return of license).
                                                                        
 23        SECTION 5.  That Section 41-1223, Idaho Code, be, and the same  is  hereby
 24    amended to read as follows:
                                                                        
 25        41-1223.  LICENSING  OF  SURPLUS  LINE  BROKERS.  (1) Any individual while
 26    licensed in this state as a resident general lines agent producer licensed for
 27    property or casualty insurance who has had at least two (2) years'  experience
 28    as a licensed agent or broker for the lines of insurance for which he is seek-
 29    ing  to be licensed as a surplus lines broker, and who is deemed by the direc-
 30    tor to be competent and trustworthy with respect to the  handling  of  surplus
 31    lines, and while maintaining an office at a designated location in this state,
 32    may be licensed as a surplus line broker.
 33        (2)  Application for the license shall be made to the director on forms as
 34    designated and furnished by the director.
 35        (3)  The  license  and continuation fee shall be as specified in set forth
 36    by rule pursuant to section 41-401, Idaho Code. (fee schedule).
 37        (4)  The license and licensee shall be subject to  the  applicable  provi-
 38    sions  of  chapter  10,  title 41, Idaho Code (agents, brokers, solicitors and
 39    consultants producers -- licensing). requirements and procedures).
                                                                        
 40        SECTION 6.  That Section 41-1315A, Idaho Code, be, and the same is  hereby
 41    amended to read as follows:
                                                                        
 42        41-1315A.  DISCOUNTS  TO  EMPLOYEES.  No  provision of this code title 41,
 43    Idaho Code, shall be deemed to prohibit allowance by  an  insurer,  agent,  or
 44    broker to the insurer's or licensee's bona fide full-time salaried employee of
 45    a  discount from the premium otherwise payable for insurance on the employee's
 46    life or health or those of his dependents, or on the  employee's  property  or
 47    risks  other than property or risks used or involved in business operations of
 48    the employee other than as an employee of the insurer, agent, or  broker.  The
 49    amount  of  discount shall in no event exceed the amount of agent's commission
                                                                        
                                           19
                                                                        
  1    which the employer insurer may otherwise pay, or the amount of  commission  to
  2    be  received  by  the employer agent or broker, with respect to the insurance.
  3    For the purposes of section 41-1033 (controlled  business),  Idaho  Code,  the
  4    insurance  as  to employees of an agent or broker shall be included within the
  5    controlled business of the licensee upon the basis of the commission which the
  6    licensee was entitled to receive as if the discount had not been allowed.
                                                                        
  7        SECTION 7.  That Section 41-3435, Idaho Code, be, and the same  is  hereby
  8    amended to read as follows:
                                                                        
  9        41-3435.  AGENTS  PRODUCER LICENSING. (1) Agents Producers or persons rep-
 10    resenting a  service  corporation  in  the  solicitation  and  negotiation  of
 11    subscriber's  contracts  shall qualify for and be licensed as agents producers
 12    of the service corporation in the same manner and in compliance with the  same
 13    applicable  qualifications,  licensing procedures and fees as apply under this
 14    code as to agents producers of disability insurers; except that:
 15        (a)  Any such person who holds a valid license as an agent a producer  for
 16        a disability insurer issued under chapter 10, title 41, Idaho Code, may be
 17        appointed as the agent for such service corporation without further exami-
 18        nation or other compliance with chapter 10, title 41, Idaho Code; and
 19        (b)  Nothing in this section shall prevent such person from being licensed
 20        as  a  producer  and  appointed as an agent for a life insurer or insurers
 21        under chapter 10, title 41, Idaho Code, and concurrently being licensed as
 22        an agent a producer for such a service corporation.
 23        (2)  Service corporations shall may file appointment  of  such  agents  or
 24    representatives  in  the  same  manner as provided in section 41-104718, Idaho
 25    Code, with respect to agents producers of insurers.
 26        (3)  The exceptions to license requirements set forth in chapter 10, title
 27    41, Idaho Code, shall also apply as to service corporations.
                                                                        
 28        SECTION 8.  That Section 41-4703, Idaho Code, be, and the same  is  hereby
 29    amended to read as follows:
                                                                        
 30        41-4703.  DEFINITIONS. As used in this chapter:
 31        (1)  "Actuarial  certification"  means  a written statement by a member of
 32    the American academy of actuaries or other individual acceptable to the direc-
 33    tor that a small employer carrier is in compliance with the provisions of sec-
 34    tion 41-4706, Idaho Code, based upon the person's examination and including  a
 35    review  of  the  appropriate records and the actuarial assumptions and methods
 36    used by the small employer carrier in establishing premium rates for  applica-
 37    ble health benefit plans.
 38        (2)  "Affiliate"  or  "affiliated" means any entity or person who directly
 39    or indirectly through one (1) or more  intermediaries,  controls  or  is  con-
 40    trolled by, or is under common control with, a specified entity or person.
 41        (3)  "Agent" means an agent a producer as defined in section 41-102103(9),
 42    Idaho Code, or a broker as defined in section 41-1024, Idaho Code.
 43        (4)  "Base  premium rate" means, for each class of business as to a rating
 44    period, the lowest premium rate charged or that could have been charged  under
 45    a  rating  system  for that class of business by the small employer carrier to
 46    small employers with similar case characteristics  for  health  benefit  plans
 47    with the same or similar coverage.
 48        (5)  "Board"  means  the board of directors of the small employer reinsur-
 49    ance program and the individual high risk reinsurance pool as provided for  in
 50    section 41-5502, Idaho Code.
 51        (6)  "Carrier"  means  any  entity  that provides health insurance in this
                                                                        
                                           20
                                                                        
  1    state. For the purposes of this chapter, carrier includes  an  insurance  com-
  2    pany,  a  hospital  or  professional  service corporation, a fraternal benefit
  3    society, a health   maintenance  organization,  any  entity  providing  health
  4    insurance coverage or benefits to residents of this state as certificate hold-
  5    ers  under  a  group policy issued or delivered outside of this state, and any
  6    other entity providing a plan of health insurance or health  benefits  subject
  7    to state insurance regulation.
  8        (7)  "Case  characteristics"  means demographic or other objective charac-
  9    teristics of a small employer that are considered by the small  employer  car-
 10    rier  in  the  determination of premium rates for the small employer, provided
 11    that claim experience, health status and duration of  coverage  shall  not  be
 12    case characteristics for the purposes of this chapter.
 13        (8)  "Catastrophic  health benefit plan" means a higher limit health bene-
 14    fit plan developed pursuant to section 41-4712, Idaho Code.
 15        (9)  "Class of business" means all or a separate grouping of small employ-
 16    ers established pursuant to section 41-4705, Idaho Code.
 17        (10) "Control"  shall  be  defined  in  the  same  manner  as  in  section
 18    41-3801(2), Idaho Code.
 19        (11) "Dependent" means a spouse, an unmarried child under the age of nine-
 20    teen (19) years, an unmarried child who is a full-time student under  the  age
 21    of  twenty-three  (23) years and who is financially dependent upon the parent,
 22    and an unmarried child of any age who is medically certified as  disabled  and
 23    dependent upon the parent.
 24        (12) "Director"  means  the director of the department of insurance of the
 25    state of Idaho.
 26        (13) "Eligible employee" means an employee who works on a full-time  basis
 27    and  has  a  normal  work  week  of thirty (30) or more hours or, by agreement
 28    between the employer and the carrier, an employee who  works   between  twenty
 29    (20)  and  thirty  (30) hours per week. The term includes a sole proprietor, a
 30    partner of a partnership, and an independent contractor, if the  sole  propri-
 31    etor,  partner  or  independent  contractor is included as an employee under a
 32    health benefit plan of a small employer, but does not include an employee  who
 33    works on a part-time, temporary, seasonal or substitute basis. The term eligi-
 34    ble  employee  may include public officers and public employees without regard
 35    to the number of hours worked when designated by a small employer.
 36        (14) "Established geographic service area" means  a  geographic  area,  as
 37    approved  by  the director and based on the carrier's certificate of authority
 38    to transact insurance in this state, within which the carrier is authorized to
 39    provide coverage.
 40        (15) "Health benefit plan" means any hospital or medical policy or certif-
 41    icate, any subscriber contract provided by a hospital or professional  service
 42    corporation,  or managed care organization subscriber contract. Health benefit
 43    plan does not include policies or certificates of insurance for specific  dis-
 44    ease,  hospital  confinement indemnity, accident-only, credit, dental, vision,
 45    medicare supplement, long-term care, or disability income  insurance,  student
 46    health  benefits  only coverage issued as a supplement to liability insurance,
 47    worker's compensation or similar insurance, automobile medical payment  insur-
 48    ance  or  nonrenewable  short-term coverage issues for a period of twelve (12)
 49    months or less.
 50        (16) "Index rate" means, for each class of business as to a rating  period
 51    for  small employers with similar case characteristics, the arithmetic average
 52    of the applicable base premium rate  and  the  corresponding  highest  premium
 53    rate.
 54        (17) "Late  enrollee" means an eligible employee or dependent who requests
 55    enrollment in a health benefit plan of a small employer following the  initial
                                                                        
                                           21
                                                                        
  1    enrollment  period during which the individual is entitled to enroll under the
  2    terms  of the health benefit plan, provided that the initial enrollment period
  3    is a period of at least thirty (30) days. However,  an  eligible  employee  or
  4    dependent shall not be considered a late enrollee if:
  5        (a)  The individual meets each of the following:
  6             (i)   The  individual  was covered under qualifying previous coverage
  7             at the time of the initial enrollment;
  8             (ii)  The individual lost coverage under qualifying previous coverage
  9             as a result of termination  of  employment  or  eligibility,  or  the
 10             involuntary termination of the qualifying previous coverage; and
 11             (iii) The  individual  requests  enrollment  within  thirty (30) days
 12             after termination of the qualifying previous coverage.
 13        (b)  The individual is employed  by  an  employer  which  offers  multiple
 14        health  benefit plans and the individual elects a different plan during an
 15        open enrollment period.
 16        (c)  A court has ordered coverage be provided for a  spouse  or  minor  or
 17        dependent child under a covered employee's health benefit plan and request
 18        for enrollment is made within thirty (30) days after issuance of the court
 19        order.
 20        (d)  The individual first becomes eligible.
 21        (e)  If  an  individual seeks to enroll a dependent during the first sixty
 22        (60) days of eligibility, the  coverage  of  the  dependent  shall  become
 23        effective:
 24             (i)   In  the  case  of marriage, not later than the first day of the
 25             first month beginning  after  the  date  the  completed  request  for
 26             enrollment is received;
 27             (ii)  In  the  case  of  a  dependent's birth, as of the date of such
 28             birth; or
 29             (iii) In the case of a dependent's adoption or  placement  for  adop-
 30             tion, the date of such adoption or placement for adoption.
 31        (18) "New business premium rate" means, for each class of business as to a
 32    rating  period, the lowest premium rate charged or offered or which could have
 33    been charged or offered by the small employer carrier to small employers  with
 34    similar  case  characteristics  for newly issued health benefit plans with the
 35    same or similar coverage.
 36        (19) "Plan of operation" means the plan of operation of the program estab-
 37    lished pursuant to section 41-4711, Idaho Code.
 38        (20) "Plan year" means the year that is designated as the plan year in the
 39    plan document of a group health benefit plan, except that if the plan document
 40    does not designate a plan year or if there is no plan document, the year  plan
 41    is:
 42        (a)  The deductible/limit year used under the plan;
 43        (b)  If  the plan does not impose deductibles or limits on a yearly basis,
 44        then the plan year is the policy year;
 45        (c)  If the plan does not impose deductibles or limits on a  yearly  basis
 46        or  the  insurance policy is not renewed on an annual basis, then the plan
 47        year is the employer's taxable year; or
 48        (d)  In any other case, the plan year is the calendar year.
 49        (21) "Premium" means all moneys paid by  a  small  employer  and  eligible
 50    employees  as a condition of receiving coverage from a small employer carrier,
 51    including any fees or other contributions associated with the  health  benefit
 52    plan.
 53        (22) "Program"  means the Idaho small employer reinsurance program created
 54    in section 41-4711, Idaho Code.
 55        (23) "Qualifying previous coverage"  and  "qualifying  existing  coverage"
                                                                        
                                           22
                                                                        
  1    means benefits or coverage provided under:
  2        (a)  Medicare  or  medicaid,  civilian  health  and  medical  program  for
  3        uniformed  services  (CHAMPUS), the Indian health service program, a state
  4        health benefit risk pool or any other similar publicly sponsored  program;
  5        or
  6        (b)  Any other group or individual health insurance policy or health bene-
  7        fit  arrangement  whether  or  not  subject  to  the state insurance laws,
  8        including coverage provided by a health maintenance organization, hospital
  9        or professional service corporation, or a fraternal benefit society,  that
 10        provides  benefits  similar  to  or  exceeding benefits provided under the
 11        basic health benefit plan.
 12        (24) "Rating period" means the calendar period  for  which  premium  rates
 13    established by a small employer carrier are assumed to be in effect.
 14        (25) "Reinsuring  carrier" means a small employer carrier participating in
 15    the reinsurance program pursuant to section 41-4711, Idaho Code.
 16        (26) "Restricted network provision" means any provision of a health  bene-
 17    fit  plan that conditions the payment of benefits, in whole or in part, on the
 18    use of health care providers that have entered into a contractual  arrangement
 19    with the carrier to provide health care services to covered individuals.
 20        (27) "Risk-assuming carrier" means a small employer carrier whose applica-
 21    tion is approved by the director pursuant to section 41-4710, Idaho Code.
 22        (28) "Small  employer" means any person, firm, corporation, partnership or
 23    association that is actively engaged in business that, employed an average  of
 24    at  least  two  (2) but no more than fifty (50) eligible employees on business
 25    days during the preceding calendar year and that employs at least two (2)  but
 26    no  more than fifty (50) eligible employees on the first day of the plan year,
 27    the majority of whom were and are employed within this state.  In  determining
 28    the  number of eligible employees, companies that are affiliated companies, or
 29    that are eligible to file a combined tax return for purposes  of  state  taxa-
 30    tion, shall be considered one (1) employer.
 31        (29) "Small  employer basic health benefit plan" means a lower cost health
 32    benefit plan developed pursuant to section 41-4712, Idaho Code.
 33        (30) "Small employer carrier" means a carrier that offers  health  benefit
 34    plans  covering  eligible employees of one (1) or more small employers in this
 35    state.
 36        (31) "Small employer catastrophic health  benefit  plan"  means  a  higher
 37    limit health benefit plan developed pursuant to section 41-4712, Idaho Code.
 38        (32) "Small  employer standard health benefit plan" means a health benefit
 39    plan developed pursuant to section 41-4712, Idaho Code.
                                                                        
 40        SECTION 9.  That Section 41-4933, Idaho Code, be, and the same  is  hereby
 41    amended to read as follows:
                                                                        
 42        41-4933.  EXISTING  INSURANCE LAWS TO APPLY TO THE TRUST FUND WITH CERTAIN
 43    EXCEPTIONS. The trust fund shall comply with all of the applicable  provisions
 44    of title 41, Idaho Code, with certain exceptions as follows:
 45        (1)  The creation of the trust fund by act of the legislature shall not be
 46    deemed  to be an ownership, control or operation of an insurer by a governmen-
 47    tal entity, as referred to in section 41-309,  Idaho  Code,  and  the  surplus
 48    funds  of  the  trust  fund  shall  be  considered to be dedicated and held in
 49    reserve for the purpose of providing funds for the payment of  claims  arising
 50    out of the discharge of petroleum products from tanks covered by a contract of
 51    insurance  issued  to the tank owner or operator by the trust fund as provided
 52    for in section 41-4905, Idaho Code. The absolute control  of  the  trust  fund
 53    shall be vested in the manager of the state insurance fund as trustee.
                                                                        
                                           23
                                                                        
  1        (2)  The  provisions of this chapter shall be construed to be contained in
  2    the document of organization and bylaws of the trust fund for purposes of sec-
  3    tions 41-319, 41-320 and 41-322, Idaho Code, and the director  shall  issue  a
  4    certificate  of  registration  to  and  in the name of the trust fund upon his
  5    finding that it has met all other appropriate provisions of  the  Idaho  Code,
  6    including sections 41-313, 41-316 and 41-316A, Idaho Code.
  7        (3)  Section 41-337, Idaho Code, shall not apply to contracts of insurance
  8    issued by the trust fund.
  9        (4)  Sections 41-10304 and 41-1022, Idaho Code, shall not apply to employ-
 10    ees of the state insurance fund or the trust fund.
 11        (5)  Section  41-1103,  Idaho  Code,  shall  not apply to employees of the
 12    state insurance fund or the trust fund, provided the employees restrict  their
 13    claims  adjusting  and investigation operations only to those contracts issued
 14    by the trust fund.
 15        (6)  Except as otherwise provided in this chapter, chapter 28,  title  41,
 16    Idaho Code, and chapter 14, title 30, Idaho Code, shall not apply to the trust
 17    fund  nor  shall this trust fund be construed to be a domestic mutual insurer,
 18    nor a reciprocal insurer, nor any other type of insurer currently regulated by
 19    title 41, Idaho Code, and the only organizational requirements of  this  trust
 20    fund shall be those enumerated in this chapter.
                                                                        
 21        SECTION  10.  That Section 41-5203, Idaho Code, be, and the same is hereby
 22    amended to read as follows:
                                                                        
 23        41-5203.  DEFINITIONS. As used in this chapter:
 24        (1)  "Actuarial certification" means a written statement by  a  member  of
 25    the American academy of actuaries or other individual acceptable to the direc-
 26    tor that an individual carrier is in compliance with the provisions of section
 27    41-5206,  Idaho  Code,  based  upon  the  person's examination and including a
 28    review of the appropriate records and the actuarial  assumptions  and  methods
 29    used  by  the  individual carrier in establishing premium rates for applicable
 30    health benefit plans.
 31        (2)  "Affiliate" or "affiliated" means any entity or person  who  directly
 32    or  indirectly  through  one  (1)  or more intermediaries, controls or is con-
 33    trolled by, or is under common control with, a specified entity or person.
 34        (3)  "Agent" means an agent a  producer  as  defined  in  section  41-1021
 35    03(9), Idaho Code, or a broker as defined in section 41-1024, Idaho Code.
 36        (4)  "Base  premium rate" means, as to a rating period, the lowest premium
 37    rate charged or that could have been charged under  a  rating  system  by  the
 38    individual carrier to individuals with similar case characteristics for health
 39    benefit plans with the same or similar coverage.
 40        (5)  "Carrier"  means  any  entity  that provides health insurance in this
 41    state. For purposes of this chapter, carrier includes an insurance company,  a
 42    hospital  or  professional service corporation, a fraternal benefit society, a
 43    health maintenance organization, any entity providing health insurance  cover-
 44    age  or  benefits  to  residents  of this state as certificate holders under a
 45    group policy issued or delivered outside of this state, and any  other  entity
 46    providing  a  plan  of  health  insurance  or health benefits subject to state
 47    insurance regulation.
 48        (6)  "Case characteristics" means demographic or other  objective  charac-
 49    teristics  of  an  individual that are considered by the individual carrier in
 50    the determination of premium rates for the  individual,  provided  that  claim
 51    experience,  health  status and duration of coverage shall not be case charac-
 52    teristics for the purposes of this chapter.
 53        (7)  "Control"  shall  be  defined  in  the  same  manner  as  in  section
                                                                        
                                           24
                                                                        
  1    41-3801(2), Idaho Code.
  2        (8)  "Dependent" means a spouse, an unmarried child under the age of nine-
  3    teen (19) years, an unmarried child who is a full-time student under  the  age
  4    of  twenty-three  (23) years and who is financially dependent upon the parent,
  5    and an  unmarried child of any age who is medically certified as disabled  and
  6    dependent upon the parent.
  7        (9)  "Director"  means  the director of the department of insurance of the
  8    state of Idaho.
  9        (10) "Eligible individual" means an Idaho resident individual or dependent
 10    of an Idaho resident who is under the age of sixty-five  (65)  years,  is  not
 11    eligible  for  coverage  under  a group health plan, part A or part B of title
 12    XVIII of the social security act (medicare), or a state plan under  title  XIX
 13    (medicaid) or any successor program, and who does not have other health insur-
 14    ance  coverage.  An  "eligible individual" can be the dependent of an eligible
 15    employee, which eligible employee is receiving health insurance benefits  sub-
 16    ject to the regulation of title 41, Idaho Code.
 17        (11) "Established  geographic  service  area"  means a geographic area, as
 18    approved by the director and based on the carrier's certificate  of  authority
 19    to transact insurance in this state, within which the carrier is authorized to
 20    provide coverage.
 21        (12) "Health benefit plan" means any hospital or medical policy or certif-
 22    icate,  any subscriber contract provided by a hospital or professional service
 23    corporation, or health maintenance organization  subscriber  contract.  Health
 24    benefit  plan  does not include policies or certificates of insurance for spe-
 25    cific disease, hospital confinement indemnity, accident-only, credit,  dental,
 26    vision,  medicare  supplement, long-term care, or disability income insurance,
 27    student health benefits only, coverage issued as  a  supplement  to  liability
 28    insurance, worker's compensation or similar insurance, automobile medical pay-
 29    ment  insurance,  or  nonrenewable  short-term coverage issued for a period of
 30    twelve (12) months or less.
 31        (13) "Index rate" means, as to a rating period for individuals with  simi-
 32    lar  case  characteristics, the arithmetic average of the applicable base pre-
 33    mium rate and the corresponding highest premium rate.
 34        (14) "Individual basic health benefit plan" means a lower cost health ben-
 35    efit plan developed pursuant to chapter 55, title 41, Idaho Code.
 36        (15) "Individual catastrophic A health benefit plan" means a higher  limit
 37    health benefit plan developed pursuant to chapter 55, title 41, Idaho Code.
 38        (16) "Individual  catastrophic B health benefit plan" means a health bene-
 39    fit plan with limits higher than an individual catastrophic A  health  benefit
 40    plan developed pursuant to chapter 55, title 41, Idaho Code.
 41        (17) "Individual standard health benefit plan" means a health benefit plan
 42    developed pursuant to chapter 55, title 41, Idaho Code.
 43        (18) "New  business premium rate" means, as to a rating period, the lowest
 44    premium rate charged or offered or which could have been charged or offered by
 45    the individual carrier to individuals with similar  case  characteristics  for
 46    newly issued health benefit plans with the same or similar coverage.
 47        (19) "Premium" means all moneys paid by an individual and eligible depend-
 48    ents  as  a condition of receiving coverage from a carrier, including any fees
 49    or other contributions associated with the health benefit plan.
 50        (20) "Qualifying previous coverage"  and  "qualifying  existing  coverage"
 51    means benefits or coverage provided under:
 52        (a)  Medicare  or  medicaid,  civilian  health  and  medical  program  for
 53        uniformed  services  (CHAMPUS), the Indian health service program, a state
 54        health benefit risk pool, or any other similar publicly sponsored program;
 55        or
                                                                        
                                           25
                                                                        
  1        (b)  Any group or individual health insurance  policy  or  health  benefit
  2        arrangement  whether or not subject to the state insurance laws, including
  3        coverage provided by a managed care organization, hospital or professional
  4        service corporation, or a fraternal benefit society, that  provides  bene-
  5        fits similar to or exceeding benefits provided under the basic health ben-
  6        efit plan.
  7        (21) "Rating  period"  means  the  calendar period for which premium rates
  8    established by a carrier are assumed to be in effect.
  9        (22) "Reinsuring carrier" means a carrier participating in the Idaho indi-
 10    vidual high risk reinsurance pool established in chapter 55, title  41,  Idaho
 11    Code.
 12        (23) "Restricted  network provision" means any provision of a health bene-
 13    fit plan that conditions the payment of benefits, in whole or in part, on  the
 14    use  of health care providers that have entered into a contractual arrangement
 15    with the carrier to provide health care services to covered individuals.
 16        (24) "Risk-assuming carrier" means a carrier whose application is approved
 17    by the director pursuant to section 41-5210, Idaho Code.
 18        (25) "Individual carrier" means a carrier that offers health benefit plans
 19    covering eligible individuals and their dependents.
                                                                        
 20        SECTION 11.  That Section 41-5501, Idaho Code, be, and the same is  hereby
 21    amended to read as follows:
                                                                        
 22        41-5501.  DEFINITIONS. As used in this chapter:
 23        (1)  "Agent" means an agent a producer as defined in section 41-102103(9),
 24    Idaho Code, or a broker as defined in section 41-1024, Idaho Code.
 25        (2)  "Board"  means the board of directors of the Idaho high risk individ-
 26    ual reinsurance pool established in this chapter and the Idaho small  employer
 27    reinsurance program established in section 41-4711, Idaho Code.
 28        (3)  "Carrier"  means  any  entity  that provides health insurance in this
 29    state. For purposes of this chapter, carrier includes  an  insurance  company,
 30    any other entity providing reinsurance including excess or stop loss coverage,
 31    a hospital or professional service corporation, a fraternal benefit society, a
 32    managed  care  organization, any entity providing health insurance coverage or
 33    benefits to residents of this state as certificate holders under a group  pol-
 34    icy  issued or delivered outside of this state, and any other entity providing
 35    a plan of health insurance or health benefits subject to state insurance regu-
 36    lation.
 37        (4)  "Dependent" means a spouse, an unmarried child under the age of nine-
 38    teen (19) years, an unmarried child who is a full-time student under  the  age
 39    of  twenty-three  (23) years and who is financially dependent upon the parent,
 40    and an unmarried child of any age who is medically certified as  disabled  and
 41    dependent upon the parent.
 42        (5)  "Director"  means  the director of the department of insurance of the
 43    state of Idaho.
 44        (6)  "Eligible individual" means an Idaho resident individual or dependent
 45    of an Idaho resident who is under the age of sixty-five  (65)  years,  is  not
 46    eligible  for  coverage  under  a group health plan, part A or part B of title
 47    XVIII of the social security act (medicare), or a state plan under  title  XIX
 48    (medicaid) or any successor program, and who does not have other health insur-
 49    ance  coverage.  Coverage  under  a  basic,  standard, catastrophic A or cata-
 50    strophic B health benefit plan shall not be available to any individual who is
 51    covered under other health insurance coverage. For purposes of  this  chapter,
 52    to  be  eligible,  an  individual  must  also meet the requirements of section
 53    41-5510, Idaho Code.
                                                                        
                                           26
                                                                        
  1        (7)  "Health benefit plan" means any hospital or medical policy or certif-
  2    icate, any subscriber contract provided by a hospital or professional  service
  3    corporation,  or  health  maintenance organization subscriber contract. Health
  4    benefit plan does not include policies or certificates of insurance  for  spe-
  5    cific  disease, hospital confinement indemnity, accident-only, credit, dental,
  6    vision, medicare supplement, long-term care, or disability  income  insurance,
  7    student  health  benefits  only,  coverage issued as a supplement to liability
  8    insurance, worker's compensation or similar insurance, automobile medical pay-
  9    ment insurance, or nonrenewable short-term coverage issued  for  a  period  of
 10    twelve (12) months or less.
 11        (8)  "Individual basic health benefit plan" means a lower cost health ben-
 12    efit plan developed pursuant to section 41-5511, Idaho Code.
 13        (9)  "Individual carrier" means a carrier that offers health benefit plans
 14    covering eligible individuals and their dependents.
 15        (10) "Individual  catastrophic A health benefit plan" means a higher limit
 16    health benefit plan developed pursuant to section 41-5511, Idaho Code.
 17        (11) "Individual catastrophic B health benefit plan" means a health  bene-
 18    fit  plan  offering  limits  higher  than a catastrophic A health benefit plan
 19    developed pursuant to section 41-5511, Idaho Code.
 20        (12) "Individual standard health benefit plan" means a health benefit plan
 21    developed pursuant to section 41-5511, Idaho Code.
 22        (13) "Plan" or "pool plan" means the  individual  basic,  standard,  cata-
 23    strophic  A  or  catastrophic  B plan established pursuant to section 41-5511,
 24    Idaho Code.
 25        (14) "Plan of operation" means the plan of  operation  of  the  individual
 26    high risk reinsurance pool established pursuant to this chapter.
 27        (15) "Pool" means the Idaho high risk reinsurance pool.
 28        (16) "Premium" means all moneys paid by an individual and eligible depend-
 29    ents  as  a condition of receiving coverage from a carrier, including any fees
 30    or other contributions associated with the health benefit plan.
 31        (17) "Qualifying previous coverage"  and  "qualifying  existing  coverage"
 32    means benefits or coverage provided under:
 33        (a)  Medicare  or  medicaid,  civilian  health  and  medical  program  for
 34        uniformed  services  (CHAMPUS), the Indian health service program, a state
 35        health benefit risk pool, or any other similar publicly sponsored program;
 36        or
 37        (b)  Any group or individual health insurance  policy  or  health  benefit
 38        arrangement  whether or not subject to the state insurance laws, including
 39        coverage provided by a managed care organization, hospital or professional
 40        service corporation, or a fraternal benefit society, that  provides  bene-
 41        fits similar to or exceeding benefits provided under the basic health ben-
 42        efit plan.
 43        (18) "Reinsurance  premium" means the premium set by the board pursuant to
 44    section 41-5506, Idaho Code, to be paid by  a  reinsuring  carrier  for  plans
 45    issued under the pool.
 46        (19) "Reinsuring  carrier" means a carrier participating in the individual
 47    high risk reinsurance pool established by this chapter.
 48        (20) "Restricted network provision" means any provision of a health  bene-
 49    fit  plan that conditions the payment of benefits, in whole or in part, on the
 50    use of health care providers that have entered into a contractual  arrangement
 51    with the carrier to provide health care services to covered individuals.

Statement of Purpose / Fiscal Impact


                    STATEMENT OF PURPOSE

                        RS 10560C1

This is a total rewrite of the insurance agent and broker licensing
statute. Agents and brokers will be known as producers under the 
new law, and consultants will be deleted as a licensee category. 
The repeal of former Chapter 10, Title 41, Idaho Code, and rewrite 
of this chapter are intended to simplify and reorganize the 
statutory language, to improve efficiency, to establish uniform 
definitions and licensing requirements across state lines, to 
promote increased use of technology thereby reducing the expense 
associated issuing and renewing licenses, and to effectuate 
producer licensing reciprocity and conformity with the requirements
of the federal Gramm-Leach-Bliley Act enacted November 12, 1999.




                        FISCAL IMPACT          



It is expected that this proposed legislation will have no fiscal 
impact on the General Fund.


Contact
Name:	John Goedde
Phone:	332-1355

STATEMENT OF PURPOSE/FISCAL NOTE	H 35 aa, aaS            

AMENDED SOP	AMENDED SOP	AMENDED SOP