2005 Legislation
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HOUSE BILL NO. 90 – Insurance, credit life, limit


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Bill Status

H0090...........................................................by BUSINESS
INSURANCE - CREDIT LIFE - Amends existing law to raise the statutory limit
on the amount of credit life insurance that can be written under a group
insurance policy.
02/02    House intro - 1st rdg - to printing
02/03    Rpt prt - to Bus
02/18    Rpt out - rec d/p - to 2nd rdg
02/21    2nd rdg - to 3rd rdg
02/23    3rd rdg - PASSED - 70-0-0
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Bradford, Cannon,
      Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest,
      Henderson, Jaquet, Jones, Kemp, Lake, LeFavour, Loertscher, Martinez,
      Mathews, McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen,
      Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
      Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley,
      Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail,
      Wills, Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Bilbao
    Title apvd - to Senate
02/24    Senate intro - 1st rdg - to Com/HuRes
03/09    Rpt out - rec d/p - to 2nd rdg
03/10    2nd rdg - to 3rd rdg
03/11    3rd rdg - PASSED - 32-0-2, 1 vacancy
      AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
      Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
      Gannon, Geddes, Goedde, Jorgenson, Kelly, Keough, Langhorst, Little,
      Lodge, Malepeai, Marley, McGee, McKenzie, Pearce, Richardson,
      Schroeder, Stegner, Stennett, Werk, Williams
      NAYS -- None
      Absent and excused -- Hill, Sweet, (District 21 seat vacant)
    Floor Sponsor - Coiner
    Title apvd - to House
03/14    To enrol
03/15    Rpt enrol - Sp signed
03/16    Pres signed
03/17    To Governor
03/21    Governor signed
         Session Law Chapter 67
         Effective: 07/01/05

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                              IN THE HOUSE OF REPRESENTATIVES
                                     HOUSE BILL NO. 90
                                   BY BUSINESS COMMITTEE
  1                                        AN ACT
  6    Be It Enacted by the Legislature of the State of Idaho:
  7        SECTION  1.  That  Section 41-2005, Idaho Code, be, and the same is hereby
  8    amended to read as follows:
  9        41-2005.  DEBTOR GROUPS. The lives  of  a  group  of  individuals  may  be
 10    insured  under  a  policy issued to a creditor, or to a trustee or trustees or
 11    agent designated by two (2) or more creditors, who shall be deemed the policy-
 12    holder, to insure debtors of the creditor, subject to the  following  require-
 13    ments:
 14        (1)  The  debtors  eligible for insurance under the policy shall be all of
 15    the debtors of the creditor, or all of any class or classes thereof determined
 16    by conditions pertaining to the indebtedness or to the purchase giving rise to
 17    the indebtedness. The policy may provide that the term "debtors" shall include
 18    the debtors of one (1) or more subsidiary corporations, and the debtors of one
 19    (1) or more affiliated corporations, proprietors or partnerships if the  busi-
 20    ness  of  the policyholder and of such affiliated corporations, proprietors or
 21    partnerships is under common control through  stock  ownership,  contract,  or
 22    otherwise.
 23        (2)  The  premium for the policy shall be paid by the policyholder, either
 24    from the creditor's funds, or from charges collected from the insured debtors,
 25    or from both. A policy on which part or all of the premium is  to  be  derived
 26    from  the  collection  from  the  insured  debtors of identifiable charges not
 27    required of uninsured debtors shall not include, in the class  or  classes  of
 28    debtors  eligible  for insurance, debtors under obligations outstanding at its
 29    date of issue without evidence of individual insurability unless at least sev-
 30    enty-five per cent percent (75%) of the then eligible debtors elect to pay the
 31    required charges. A policy on which no part of the premium is  to  be  derived
 32    from  the  collection  of  such  identifiable charges must insure all eligible
 33    debtors, or all except any as to whom evidence of individual  insurability  is
 34    not satisfactory to the insurer.
 35        (3)  The  policy  may  be  issued only if the group of eligible debtors is
 36    then receiving new entrants at the rate of at least one hundred (100)  persons
 37    yearly,  or  may  reasonably be expected to receive at least one hundred (100)
 38    new entrants during the first policy year, and only if the policy reserves  to
 39    the  insurer  the right to require evidence of individual insurability if less
 40    than seventy-five per cent percent (75%) of the new entrants  become  insured.
 41    The  policy  may exclude from the classes eligible for insurance classes or of
 42    debtors determined by age.
 43        (4)  The amount of insurance on the life of the a debtor shall at no  time
  1    exceed  the  amount  owed  by him to the creditor, or seventy-five one hundred
  2    fifty  thousand dollars ($7150,000), whichever is less.
  3        (5)  The insurance shall be payable  to  the  policyholder.  Such  payment
  4    shall reduce or extinguish the unpaid indebtedness of the debtor to the extent
  5    of such payment.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE

                             RS 14523

This legislation increases the coverage that can be written under
a group policy of credit life insurance from seventy-five thousand
dollars to one hundred fifty thousand dollars.  The current
seventy-five thousand dollar limitation was enacted in 1983.  Since
that time, the size of consumer real estate loans made under the
Idaho Credit Code and other loans have risen to meet the rising
cost of housing.  This legislation places a more practical limit on
the amount of insurance that can be written under a group policy of
credit life insurance.

                          FISCAL IMPACT

There is no fiscal impact to the State of Idaho or to local

Name:   Mike Brassey 
Phone:  336-7930

STATEMENT OF PURPOSE/FISCAL NOTE                      H 90