Print Friendly SENATE BILL NO. 1219 – Insurance, administered by county
SENATE BILL NO. 1219
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S1219................................................by JUDICIARY AND RULES
INSURANCE - Amends existing law relating to insurance to remove exemption
language referencing plans administered by counties; and to provide for
petitions for exemptions.
03/17 Senate intro - 1st rdg - to printing
03/18 Rpt prt - to Com/HuRes
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-eighth Legislature First Regular Session - 2005
IN THE SENATE
SENATE BILL NO. 1219
BY JUDICIARY AND RULES COMMITTEE
1 AN ACT
2 RELATING TO INSURANCE; AMENDING SECTION 41-4003, IDAHO CODE, TO REMOVE EXEMP-
3 TION LANGUAGE REFERENCING PLANS ADMINISTERED BY COUNTIES; AMENDING SECTION
4 41-4009, IDAHO CODE, TO PROVIDE FOR PETITIONS FOR EXEMPTIONS; AND PROVID-
5 ING AN EFFECTIVE DATE.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 41-4003, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 41-4003. REGISTRATION REQUIRED -- EXEMPTIONS -- NOT SUBJECT TO INSURANCE
10 CODE. (1) No self-funded plan shall operate in this state except while regis-
11 tered with the director as hereinafter provided. Self-funded plans already in
12 operation at the effective date of this act shall so register within ninety
13 (90) days after such effective date.
14 (2) No registration shall be required of:
15 (a) Any self-funded plan established for the sole purpose of funding the
16 dollar amount of a deductible clause contained in the provisions of an
17 insurance contract issued by an insurer duly authorized to transact dis-
18 ability insurance in this state if the deductible does not exceed an
19 amount applicable to each beneficiary of two thousand dollars ($2,000) per
20 annum and the total of all obligations to all beneficiaries insured under
21 the plan arising out of the application of such a deductible does not
22 exceed the aggregate amount of two hundred thousand dollars ($200,000) in
23 any one (1) year.
24 (b) Any plan established and maintained for the purpose of complying with
25 any worker's compensation law or unemployment compensation disability
26 insurance law.
27 (c) Any plan administered by or for the federal government or agency
28 thereof. or any county of this state.
29 (d) Any plan which is primarily for the purpose of providing first aid
30 care and treatment, at a dispensary of an employer, for injury or sickness
31 of employees while engaged in their employment.
32 (e) Any employer's self-insured health plan or service established and
33 maintained solely for its members and their immediate families, or to any
34 self-insured health plan or service established, maintained, and insured
35 jointly by any employer and any labor organization or organizations if
36 such health plan or service has been in existence and operation for fif-
37 teen (15) years immediately preceding the effective date of this act.
38 (3) Plans while so registered shall not be deemed to be engaged in the
39 business of insurance and shall not be subject to provisions of the Idaho
40 insurance code except as expressly provided in this act.
41 SECTION 2. That Section 41-4009, Idaho Code, be, and the same is hereby
42 amended to read as follows:
1 41-4009. INVESTMENT OF TRUST FUND. (1) The trustee may invest reserves
2 and other funds available for the purpose in the trust fund of a self-funded
3 plan in the following kinds of investments only:
4 (a) General obligations of the United States government, or of any state,
5 district, commonwealth, or territory of the United States, or of any munici-
6 pality, county, or other political subdivision or agency thereof.
7 (b) Obligations the payment of principal and interest of which is guaran-
8 teed by any such government or agency.
9 (c) Corporate bonds and similar obligations meeting the requirements
10 specified for investment of funds of insurers under section 41-711, Idaho
12 (d) Collateral loans payment of principal and interest of which is ade-
13 quately secured by securities in which the trust fund could lawfully invest
15 (e) Deposits, savings accounts, and share accounts in established banks
16 and savings and loan associations located in the United States. Such invest-
17 ment as to any one (1) such institution shall not be in excess of the amount
18 covered by applicable deposit, savings, and share account insurance.
19 (2) In addition to investments excluded under subsection (1) above, the
20 trustee is expressly prohibited from investing trust fund moneys in:
21 (a) Any loan to or security of any employer participating in the plan, or
22 to or of any officer, director, subsidiary or affiliate of any such employer.
23 (b) The security of any person in which the trustee, administrator, or
24 any consultant of the plan has a direct or indirect material pecuniary inter-
26 (c) Real estate or loans thereon.
27 (d) Any personal loan, other than a collateral loan referred to in sub-
28 section (1)(d) above, but subject to subdivisions (a) and (b) of this subsec-
29 tion (2).
30 (3) All such investments shall be made and held in the name of the trust
31 fund, and the interest and yield thereon shall inure to the account of the
32 trust fund.
33 (4) No investment shall be made unless authorized in writing by the
34 trustee and so shown in the records of the trust fund.
35 (5) Any person who authorizes any investment of trust fund moneys in
36 violation of this section shall, in addition to other penalty therefor, be
37 liable for all loss suffered by the trust fund on account of the investment.
38 (6) No investment made in violation of this section shall constitute an
39 "asset" in any determination of the financial condition of the trust fund.
40 (7) A trustee of a self-funded plan offered by a single governmental
41 entity, but not including a group of entities or a joint powers entity, may
42 petition the director for an exemption from this section. The director shall
43 grant such petition if the director finds that the proposed investment plan is
44 consistent with the fiduciary obligations of the trustee as set forth in this
45 chapter. A failure by the trustee to adhere to an investment plan approved by
46 the director shall be a violation of this section.
47 SECTION 3. This act shall be in full force and effect on and after Janu-
48 ary 1, 2006.
STATEMENT OF PURPOSE
The purpose of this legislation is to eliminate the
exemption from the requirement for registration of any self-
funded health care plans administered by or for any county of
this State and thereby provide better protections for consumers
and health care providers. Individual counties will have the
opportunity to petition the Department of Insurance for an
exemption from the investment requirements in this chapter. The
legislation would also eliminate the need to pursue litigation
to clarify the intent of current law with regard to such plans
and would provide a level playing field by subjecting self-
funded plans of counties to the same regulations and consumer
protections as self-funded plans of other employers.
There would be a positive impact on the General Fund equal
to any tax that would be paid to the General Fund as a result of
this legislation. Greater regulation would also reduce the
possibility of insolvency which might have to be borne by
government if unregulated plans lack sufficient reserves or
underwrite inadequately. There could be a slight impact on some
county governments that would have to pay a tax to the General
Fund to the extent that they are not paying such a tax at the
present time. The amount of such tax is too speculative to
quantify because the rate to be applied is unknowable at this
Name: Senator Dean Cameron
STATEMENT OF PURPOSE/FISCAL NOTE S 1219