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H0115...........................................................by BUSINESS INSURANCE FRAUD - Amends existing law relating to insurance fraud to revise the definition for "authorized agencies"; to revise provisions applicable to the disclosure of information by insurers; and to revise provisions applicable to the investigation section of the Department of Insurance. 02/04 House intro - 1st rdg - to printing 02/07 Rpt prt - to Bus 02/16 Rpt out - rec d/p - to 2nd rdg 02/17 2nd rdg - to 3rd rdg 02/22 3rd rdg - PASSED - 68-2-0 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, 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, Mr. Speaker NAYS -- McKague, Wood Absent and excused -- None Floor Sponsor - Chadderdon Title apvd - to Senate 02/23 Senate intro - 1st rdg - to Com/HuRes 03/04 Rpt out - rec d/p - to 2nd rdg 03/07 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 - Compton 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 74 Effective: 07/01/05
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature First Regular Session - 2005 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 115 BY BUSINESS COMMITTEE 1 AN ACT 2 RELATING TO INSURANCE FRAUD; AMENDING SECTION 41-291, IDAHO CODE, TO REVISE 3 THE DEFINITION FOR "AUTHORIZED AGENCIES" AND TO MAKE TECHNICAL CHANGES; 4 AMENDING SECTION 41-292, IDAHO CODE, TO REVISE PROVISIONS APPLICABLE TO 5 THE DISCLOSURE OF INFORMATION BY INSURERS RELATING TO POSSIBLE FRAUD AND 6 TO MAKE TECHNICAL CHANGES; AND AMENDING SECTION 41-295, IDAHO CODE, TO 7 REVISE PROVISIONS APPLICABLE TO THE INVESTIGATION SECTION OF THE DEPART- 8 MENT OF INSURANCE. 9 Be It Enacted by the Legislature of the State of Idaho: 10 SECTION 1. That Section 41-291, Idaho Code, be, and the same is hereby 11 amended to read as follows: 12 41-291. DEFINITIONS. As used in sections 41-290 through and including 13 section41-298, Idaho Code: 14 (1) Sections 41-290 through 41-298, Idaho Code, shall be known as the 15 "Idaho Arson and Fraud Reporting-Immunity Act." 16 (2) "Authorized agencies" shall mean: 17 (a) The director, IdahoAny law enforcement agency of this state; police;18 (b) TheAny prosecuting attorney who may be responsible for prosecution 19 in the countyjurisdiction where the fire or fraud occurred; 20 (c) The attorney responsible for the prosecution in the countyjurisdic- 21 tion where the fire or fraud occurred as designated by the attorney gen- 22 eral; 23 (d) The department of insurance, which includes the state fire marshal. 24 (3) Solely for the purpose of section 41-292(1), Idaho Code, "authorized 25 agencies" shall also include: 26 (a) The United States attorney's office when authorized or charged with 27 investigation or prosecution of the fire or fraud in question; 28 (b) The federal bureau of investigation or any other federal agency, 29 charged with investigation or prosecution of the fire or fraud in ques- 30 tion. 31 (4) "Relevant" means information having any tendency to make the exis- 32 tence of any fact that is of consequence to the investigation or determination 33 of the issue more probable or less probable than it would be without the evi- 34 dence. 35 (5) Material will be "deemed important," if within the sole discretion of 36 the "authorized agency," such material is requested by the "authorized 37 agency." 38 (6) "Action," as used in this statutechapter, shall include nonaction or 39 the failure to take action. 40 (7) "Immunity" means that no civil action may arise against any person 41 for furnishing information pursuant to section 41-248, 41-258, 41-290, 41-292, 42 41-296 or 41-297, Idaho Code, where actual malice on the part of the insurance 43 company, department of insurance, state fire marshal, authorized agency, their 2 1 employees or agents, is not present. 2 (8) "Financial loss" includes, but is not limited to, loss of earnings, 3 out-of-pocket and other expenses, repair and replacement costs and claims pay- 4 ments. 5 (9) "Person" means a natural person, company, corporation, unincorporated 6 association, partnership, professional corporation and any other legal entity. 7 (10) "Practitioner" means a licensee of this state authorized to practice 8 medicine and surgery, psychology, chiropractic, law or any other licensee of 9 the state whose services are compensated, directly or indirectly, by insurance 10 proceeds, or a licensee similarly licensed in other states and nations or the 11 practitioner of any nonmedical treatment rendered in accordance with a recog- 12 nized religious method of healing. 13 (11) "Statement" includes, but is not limited to, any notice statement, 14 any statement submitted on applications for insurance, proof of claim, proof 15 of loss, bill of lading, receipt for payment, invoice, account, estimate of 16 property damages, bills for services, diagnosis, prescription, hospital or 17 doctor records, X-rays, test results or other evidence of loss, injury or 18 expense, whether oral, written or computer generated. 19 (12) "Insurer" shall mean any insurance company contemplated by title 41, 20 Idaho Code, any business operating as a self-insured for any purpose, the 21 state insurance fund, and any self-insured as contemplated by title 72, Idaho 22 Code. 23 SECTION 2. That Section 41-292, Idaho Code, be, and the same is hereby 24 amended to read as follows: 25 41-292. DISCLOSURE OF INFORMATION BY INSURERS. (1) The director of the 26 department of insurance, state fire marshal or any authorized agency may, in 27 writing, require the insurance company at interest to release to the request- 28 ing agency any or all relevant information or evidence deemed important to the 29 authorized agency, director or state fire marshal which the company may have 30 in its possession, relating to the loss in question. Relevant information may 31 include, without limitation herein: 32 (a) Pertinent insurance policy information relevant to a loss under 33 investigation and any application for such a policy; 34 (b) Policy premium payment records which are available; 35 (c) History of previous claims made by the insured; 36 (d) Material relating to the investigation of the loss, including state- 37 ments of any person, proof of loss, and any other evidence relevant to the 38 investigation. 39 (2) (a) When an insurance company has facts to support a belief that a 40 loss in which it has an interest may be of other than accidental cause, 41 then, for the purpose of notification and for having such loss investi- 42 gated, the company shall, in writing, notify the director of the depart- 43 ment of insurance, or the state fire marshal, and any other authorized44 agencyand provide any or all material developed from the company's 45 inquiry into the loss. 46 (b) When an insurance company provides the director of the department of 47 insurance or the state fire marshal with notice of a loss, it shall be 48 sufficient notice for the purpose of this actchapter. 49 (c) Nothing in section 41-292(1), Idaho Code, shall abrogate or impair 50 the rights or powers created under section 41-292(2), Idaho Code. 51 (3) The director of the department of insurance, the state fire marshal 52 or thean authorized agency provided with information pursuant to section 53 41-248, 41-258, 41-290 or 41-292(1) or (2), Idaho Code, and in furtherance of 3 1 its own purposes, may release or provide such information to any of the other 2 authorized agencies. 3 (4) Any insurance company providing information to an authorized agency 4 or agencies pursuant to section 41-258, 41-290 or 41-292(1) or (2), Idaho 5 Code, shall have the right to request relevant information relative to the 6 loss in question and to receive, within a reasonable time, not to exceed 7 thirty (30) days, the information requested, if the information is not other- 8 wise privileged by law. 9 (5) In the absence of fraud or malice, no person shall be subject to 10 civil liability for libel, slander or any other relevant tort cause of action 11 by virtue of filing reports or furnishing other information required by this 12 statutechapter or required by the director of the department of insurance 13 under the authority granted in this statutechapter, and no civil cause of 14 action of any nature shall arise against such person: 15 (a) For any information relating to suspected fraudulent insurance acts 16 furnished to or received from law enforcement officialsauthorized agen- 17 cies, their agents and employees; or 18 (b) For any information relating to suspected fraudulent insurance acts 19 furnished to or received from other persons subject to the provisions of 20 this chapter; or 21 (c) For any such information furnished in reports to the department of 22 insurance, frauds bureau,national association of insurance commissioners, 23 national insurance crime bureau or any organization established to detect 24 and prevent fraudulent insurance acts, their agents, employees or desig- 25 nees, nor shall the director or any employee of the department of insur- 26 ance, frauds bureau,acting without malice in the absence of fraud, be 27 subject to civil liability for libel, slander ofor any other relevant 28 tort and no civil cause of action of any nature shall arise against such 29 person by virtue of the publication of any report or bulletin related to 30 the official activities of the department of insurance. frauds bureau.31 Nothing herein is intended to abrogate or modify in any way any common law 32 or statutory privilege or immunity heretofore enjoyed by any person. 33 (6) For purposes of subsection (5) of this section, there shall exist a 34 rebuttable presumption that the person has acted without fraud or malice. 35 SECTION 3. That Section 41-295, Idaho Code, be, and the same is hereby 36 amended to read as follows: 37 41-295. DUTIES OF THE INVESTIGATION SECTION. The investigation section of 38 the department of insurance shall have the following duties: 39 (1) To conduct civil or criminal investigations within or outside this 40 state as deemed necessary to determine whether any person has violated any 41 provision of title 41, Idaho Code. 42 (2) For purposes of any investigation under this code, the director, or 43 any officer designated by him, may administer oaths and affirmations, subpoena 44 bank records, subpoena witnesses and compel their attendance, take evidence, 45 and require the production of any books, papers, correspondence, memoranda, 46 agreements, or other documents the director deems relevant or material to the 47 investigation. 48 (3) The investigation section shall furnish all papers, documents, 49 reports, complaints, or other facts of evidence to any police, sheriff or 50 other law enforcement agency, when so requested, and will assist and cooperate 51 with such law enforcement agencies. 52 (4) The investigation section shall refer criminal violations of the code 53 to the attorney general, orcounty prosecutor, or other prosecutor having 4 1 jurisdiction of any such violation. The attorney general, orcounty prosecu- 2 tor, or other prosecutor shall promptly institute and prosecute such action 3 or proceedings against such person as the information may require or justify. 4 Whoever is the prosecuting attorney of record shall have exclusive authority 5 in all matters regarding such action or proceeding. 6 (5) The investigation section shall have such other duties as the direc- 7 tor of the department of insurance shall assign or as contained elsewhere in 8 title 41, Idaho Code. 9 (6) The investigation section shall be permitted to seek court ordered 10 restitution as reimbursement, for the cost of investigation from those indi- 11 viduals successfully prosecuted under section 41-293, Idaho Code. Any restitu- 12 tion payments received pursuant to this section shall be deposited in the 13 insurance administrative account as provided in section 41-401, Idaho Code. 14 (7) There is hereby created an account in the agency asset fund in the15 state treasury, to be designated as the fraud investigation and prevention16 account. The account shall be used by the director of the department of insur-17 ance for enforcement of this chapter, investigation of cases of insurance18 fraud and related violations of laws of this state.19 (8) All claims against the account shall be examined, audited and allowed20 in the manner now or hereafter provided by law. All moneys placed in the21 account are hereby perpetually appropriated to the department of insurance for22 the purposes of the provisions of this section.23 (9) Pending use for the purposes of the provisions of this section,24 moneys in the account shall be invested by the state treasurer in the same25 manner as provided under section 67-1210, Idaho Code, with respect to other26 surplus or idle moneys in the state treasury. Interest earned on the invest-27 ments shall be returned to the account.
STATEMENT OF PURPOSE RS 14424C1 This proposal amends insurance code provisions relating to reporting and enforcement of insurance fraud. The amendments clarify that all Idaho law enforcement agencies and any prosecutor that may have jurisdiction constitute authorized entities for insurance fraud reporting purposes. The changes also clarify how any funds received by the Department's fraud investigation section as restitution should be handled. The amendments delete references to an insurance fraud account that was part of the original enactment, but has never been funded by the Legislature. The insurance fraud investigation unit is a section within the Department of Insurance and is funded in the same manner as other sections of the Department. Therefore, there has not been a need for a separate fraud investigation funding account. FISCAL IMPACT None. CONTACT Name: Shad Priest Agency: Insurance, Dept. of Phone: 334-4214 Statement of Purpose/Fiscal Impact H 115