View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
H0112...........................................................by BUSINESS
DOMESTIC RECIPROCAL INSURER - Amends existing law to delete language
applicable to domestic reciprocal insurers which exclusively insure members
who are governmental entities.
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
02/18 3rd rdg - PASSED - 63-0-7
AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Bradford, Cannon,
Collins, Crow, Deal, Denney, Edmunson, Ellsworth, Eskridge,
Field(18), Field(23), Garrett, Hart, Harwood, Henbest, Jaquet, Jones,
Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews, McGeachin,
McKague, Miller, Mitchell, Moyle, Nielsen, Pasley-Stuart, Pence,
Ring, Roberts, Rusche, Rydalch, Sali, Sayler, Schaefer, Shepherd(2),
Shepherd(8), Shirley, Skippen, Smith(30), Smith(24), Smylie,
Snodgrass, Trail, Wills, Wood, Mr. Speaker
NAYS -- None
Absent and excused -- Chadderdon, Clark, Henderson, Nonini, Raybould,
Ringo, Stevenson
Floor Sponsor - Snodgrass
Title apvd - to Senate
02/22 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 - Goedde
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 72
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. 112
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO RECIPROCAL INSURERS; AMENDING SECTIONS 41-2918 AND 41-2926, IDAHO
3 CODE, TO DELETE LANGUAGE APPLICABLE TO DOMESTIC RECIPROCAL INSURERS WHICH
4 EXCLUSIVELY INSURE MEMBERS WHO ARE GOVERNMENTAL ENTITIES.
5 Be It Enacted by the Legislature of the State of Idaho:
6 SECTION 1. That Section 41-2918, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 41-2918. FINANCIAL CONDITION -- METHOD OF DETERMINING. In determining the
9 financial condition of a reciprocal insurer the director shall apply the fol-
10 lowing rules:
11 (1) He shall charge as liabilities the same reserves as are required of
12 incorporated insurers issuing nonassessable policies on a reserve basis.
13 (2) The surplus deposits of subscribers shall be allowed as assets,
14 except that any premium deposits delinquent for ninety (90) days shall first
15 be charged against such surplus deposit.
16 (3) The surplus deposits of subscribers shall not be charged as a liabil-
17 ity.
18 (4) All premium deposits delinquent less than ninety (90) days shall be
19 allowed as assets.
20 (5) An assessment levied upon subscribers, and not collected, shall not
21 be allowed as an asset.
22 (6) The contingent liability of subscribers shall not be allowed as an
23 asset.
24 (7) The computation of reserves shall be based upon premium deposits
25 other than membership fees and without any deduction for expenses and the com-
26 pensation of the attorney.
27 (8) A domestic reciprocal insurer, which exclusively insures members who
28 are governmental entities, as defined in subsections 1, 2 and 3 of section
29 6-902, Idaho Code, shall establish a loss paying fund in an amount sufficient
30 to meet the requirements of the reinsurer for the purpose of purchasing excess
31 of aggregate reinsurance. A loss paying fund is defined for the purpose of
32 this title as funds set aside or maintained for the purpose of paying claims,
33 claims costs including adjustment costs, litigation fees and court costs and
34 other related costs. Excess of aggregate reinsurance is defined for the pur-
35 poses of this title as insurance coverage provided by a reinsurer wherein the
36 reinsurer assumes the loss above the retentions or loss paying fund of the
37 reinsured. Its purpose is to limit aggregate loss over a specified period of
38 time.
39 The excess of aggregate reinsurance shall carry at least a thirty (30) day
40 written cancellation clause. If the reinsurer elects to cancel the excess of
41 aggregate reinsurance contract, a copy of the cancellation notice must be for-
42 warded immediately to the director of the department of insurance of the state
43 of Idaho.
2
1 SECTION 2. That Section 41-2926, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 41-2926. NONASSESSABLE POLICIES. (1) Nongovernmental entities. If a
4 reciprocal insurer has a surplus of assets over all liabilities at least equal
5 to the total surplus required in section 41-313, Idaho Code, as to such
6 insurer, upon application of the attorney and as approved by the subscribers'
7 advisory committee the director shall issue his certificate authorizing the
8 insurer to extinguish the contingent liability of subscribers under its poli-
9 cies then in force in this state, and to omit provisions imposing contingent
10 liability in all policies delivered or issued for delivery in this state for
11 so long as all such surplus remains unimpaired.
12 (2) Upon impairment of such surplus, the director shall forthwith revoke
13 the certificate. Such revocation shall not render subject to contingent lia-
14 bility any policy then in force and for the remainder of the period for which
15 the premium has theretofore been paid; but after such revocation no policy
16 shall be issued or renewed without providing for contingent assessment liabil-
17 ity of the subscriber.
18 (3) The director shall not authorize a domestic reciprocal insurer so to
19 extinguish the contingent liability of any of its subscribers or in any of its
20 policies to be issued, unless it qualifies to and does extinguish such liabil-
21 ity of all its subscribers and in all such policies for all kinds of insurance
22 transacted by it. Except, that if required by the laws of another state in
23 which the insurer is transacting insurance as an authorized insurer, the
24 insurer may issue policies providing for the contingent liability of such of
25 its subscribers as may acquire such policies in such state, and need not
26 extinguish the contingent liability applicable to policies theretofore in
27 force in such state.
28 (4) Governmental entities. If a domestic reciprocal insurer licensed to
29 do business in this state as such and insuring only governmental entities of
30 this state has a loss paying fund as required by section 41-2918(8), Idaho
31 Code, the director shall issue his certificate authorizing the insurer to
32 extinguish any contingent liability of the member under its policy or policies
33 and to omit provisions imposing contingent liability in all policies delivered
34 or issued for delivery in this state.
STATEMENT OF PURPOSE
RS 14416
The subsection proposed for repeal by this legislation allowed a
reciprocal insurer made up of only governmental entities to operate
without meeting financial surplus requirements applicable to other
types of insurers if the reciprocal insurer maintained reinsurance
and a loss paying fund. In 1986, legislation was adopted that
required all reciprocal insurers, including those made up
exclusively of governmental entities, to meet financial surplus
requirements. As a result of this change, the requirement for
reinsurance and a loss paying fund is no longer necessary.
FISCAL IMPACT
None.
CONTACT
Name: Shad Priest
Agency: Insurance, Dept. of
Phone: 334-4214
Statement of Purpose/Fiscal Impact H 112