Print Friendly HOUSE BILL NO. 233 – Insurers/certain/invest real estate
HOUSE BILL NO. 233
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INSURERS - Amends existing law to specify the maximum aggregate amount of
real estate which may be invested by a domestic reciprocal insurer
comprised of and exclusively insuring members who are political
subdivisions of the state.
02/14 House intro - 1st rdg - to printing
02/15 Rpt prt - to Bus
02/28 Rpt out - rec d/p - to 2nd rdg
03/01 2nd rdg - to 3rd rdg
Rls susp - PASSED - 62-0-8
AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
Bruneel, Callister, Campbell, Chase, Collins, Crow, Cuddy, Deal,
Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20), Gagner,
Gould, Hadley, Hammond, Harwood, Henbest, Higgins, Hornbeck, Jones,
Kellogg, Kendell, Kunz, Lake, Langford, Mader, Marley, McKague,
Meyer, Moss, Moyle, Pearce, Pischner, Pomeroy, Raybould, Ridinger,
Roberts, Robison, Sali, Schaefer, Sellman, Shepherd, Smith, Smylie,
Stevenson, Stone, Tilman, Trail, Wheeler, Wood, Young
NAYS -- None
Absent and excused -- Bradford, Clark, Jaquet, Loertscher,
Montgomery, Mortensen, Swan, Mr. Speaker
Floor Sponsor -- Black
Title apvd - to Senate
03/02 Senate intro - 1st rdg - to Com/HuRes
03/14 Rpt out - rec d/p - to 2nd rdg
03/15 2nd rdg - to 3rd rdg
03/20 3rd rdg - PASSED - 30-1-4
AYES -- Andreason, Branch, Boatright, Brandt, Bunderson, Burtenshaw,
Cameron, Danielson, Darrington, Davis, Deide, Frasure, Geddes,
Goedde, Hawkins, Ingram, Ipsen, Lee, Lodge, Noh, Richardson, Risch,
Sandy, Schroeder, Sims, Sorensen, Thorne, Wheeler, Whitworth,
NAYS -- Stegner
Absent and excused -- Dunklin, Keough, King-Barrutia, Stennett
Floor Sponsor -- Ipsen
Title apvd - to House
03/21 To enrol
03/22 Rpt enrol - Sp signed - Pres signed - to Gov
03/23 Governor signed
Session Law Chapter 174
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 233
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO REAL ESTATE INVESTMENTS; AMENDING SECTION 41-728, IDAHO CODE, TO
3 SPECIFY THE MAXIMUM AGGREGATE AMOUNT OF REAL ESTATE WHICH MAY BE INVESTED
4 BY A DOMESTIC RECIPROCAL INSURER COMPRISED OF AND EXCLUSIVELY INSURING
5 MEMBERS WHO ARE POLITICAL SUBDIVISIONS OF THE STATE; TO CORRECT CODIFIER'S
6 ERRORS AND TO MAKE TECHNICAL CORRECTIONS.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 41-728, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 41-728. REAL ESTATE. (1) An insurer may acquire, invest in, own, main-
11 tain, alter, furnish, improve, manage, lease and convey the following real
12 estate only:
13 (a) Land and buildings used for home office purposes, together with such
14 other real estate as is required for its accommodation in the convenient
15 transaction of its business.
16 (b) Real estate acquired in satisfaction in full or in part of or through
17 foreclosure of or judgment obtained upon, loans, mortgages, liens or other
18 evidences of indebtedness previously owing to the insurer in the regular
19 course of its business.
20 (c) Real estate acquired in part payment of the consideration in the sale
21 of other real estate owned by the insurer.
22 (d) Real estate acquired by gift or devise.
23 (e) Real estate acquired through a lawful merger or consolidation of
24 another insurer and not required for its accommodation as provided in sub-
25 division paragraph (a) above of this subsection.
26 (f) Real estate for the production of income, under lease, or being con-
27 structed under a definite agreement providing for lease, to solvent insti-
28 tutions for commercial or industrial purposes, other than for agricul-
29 tural, horticultural, ranch, mining, mineral, oil, recreational, amuse-
30 ment, club, motel, or hotel purposes.
31 (2) The aggregate amount so invested by the insurer shall not exceed:
32 (a) If for home office and its other purposes pursuant to subdivision
33 paragraph (a) above of this subsection, ten per cent percent (10%) of the
34 insurer's assets, subject to the right of the director to approve an addi-
35 tional amount after hearing and for good cause shown.
36 (b) If for income purposes pursuant to subdivision paragraph (f) above of
37 this subsection, five per cent percent (5%) of the insurer's assets.
38 (c) In all categories and for all purposes, not to exceed twenty per cent
39 percent (20%) of the insurer's assets.
40 (d) Notwithstanding the provisions of paragraphs (a) through (c) of this
41 subsection, the aggregate amount invested by a domestic reciprocal insurer
42 which is comprised of and exclusively insures members who are political
43 subdivisions of the state, as defined in section 6-902 2., Idaho Code,
1 shall not exceed:
2 (i) Twenty-five percent (25%) from July 1, 2001, to June 30, 2003;
3 (ii) Twenty percent (20%) from July 1, 2003, to June 30, 2004; and
4 (iii) Fifteen percent (15%) on July 1, 2004, and each year thereaf-
6 (3) An insurer may lease to others part of real property otherwise occu-
7 pied by it for home office and other purposes under subsection (1)(a) above of
8 this section, but the value of the entire property must be included for the
9 purposes of the limitation upon aggregate real estate investments provided in
10 subsection (2)(a) above of this section.
STATEMENT OF PURPOSE
The Idaho Counties Risk Management Program (ICRMP) is an
association of local governmental entities organized under a
joint powers agreement in accordance with Idaho law. Its purpose
is to pooi resources in order for these entities to self insure
against risk, and obtain reinsurance and excess insurance
coverage. It consists of 520 entities including 39 counties, 163
cities, 59 highway districts and numerous other entities
including fire, school, and water and sewer districts, hospitals
and a junior college. Under Idaho law, ICRMP is regulated by the
Department of Insurance as if it were a reciprocal insurance
Because ICRMP consists entirely of local government entities, it
is restricted by state law to certain types of investments. These
investments (primarily bonds) are very low yield in comparison to
the types of investments most insurance companies may engage in.
As a result, investment of assets in real estate has been seen to
be a reasonable investment option.
This bill is designed to afford ICRMP (and other public entities
that may decide to form similar joint powers associations to self
insure) the flexibility to use real estate as an investment
option for up to fifteen percent (15%) of its total assets. As of
this time ICRMP s real estate holdings are over 15% of its
assets. This bill affords ICRMP a three-year time period to come
into compliance with the 15% level. Because ICRMP is the only
public entity reciprocal insurer in Idaho, this bill will have no
effect whatever on any other foreign or domestic insurer that
does business in this state.
This bill has no impact on the general fund.
CONTACT: Michael J. Kane
Idaho Counties Risk Management Program
(208) 342 4545
STATEMENT OF PURPOSE/FISCAL NOTE H 23