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H0449...........................................................by BUSINESS INSURERS - Amends existing law to provide that an insurer or insurance provider shall not be prohibited from providing to a policyholder or prospective policyholder inducements of an aggregate value of $50.00 or less. 01/24 House intro - 1st rdg - to printing 01/25 Rpt prt - to Bus
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature Second Regular Session - 2006 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 449 BY BUSINESS COMMITTEE 1 AN ACT 2 RELATING TO INSURANCE TRADE PRACTICES AND FRAUD; AMENDING SECTION 41-1314, 3 IDAHO CODE, TO PROVIDE THAT AN INSURER OR INSURANCE PROVIDER SHALL NOT BE 4 PROHIBITED FROM PROVIDING TO A POLICYHOLDER OR PROSPECTIVE POLICYHOLDER 5 INDUCEMENTS OF AN AGGREGATE VALUE OF FIFTY DOLLARS OR LESS AND TO MAKE 6 TECHNICAL CORRECTIONS. 7 Be It Enacted by the Legislature of the State of Idaho: 8 SECTION 1. That Section 41-1314, Idaho Code, be, and the same is hereby 9 amended to read as follows: 10 41-1314. REBATES -- ILLEGAL INDUCEMENTS. (1) Except as otherwise 11 expressly provided by law, no person shall knowingly make, permit to be made, 12 or offer to make any contract orof insurance, or of annuity, or agreement as 13 to such contract, other than as plainly expressed in the contract issued 14 thereon, or pay or allow, or give or offer to pay, allow, or give, directly or 15 indirectly, as inducement to such insurance or annuity or in connection there- 16 with, any rebate of premiums payable on the contract, or of any agent's, 17 solicitor's, or broker's commission related thereto, or any special favor or 18 advantage in the dividends or other benefits thereon, or any paid employment 19 or contract for services of any kind, or any valuable consideration or induce- 20 ment whateverwhatsoever not specified in the contract; or directly or indi- 21 rectly give, or sell, or purchase or offer or agree to give, sell, purchase, 22 or allow as inducement to such insurance or annuity or in connection there- 23 with, and whether or not specified or to be specified in the policy or con- 24 tract, any agreement of any form or nature promising returns and profits, or 25 any stocks, bonds, or other securities, or interest present or contingent 26 therein or as measured thereby, of any insurer or other person, or any divi- 27 dends or profits accrued or to accrue thereon; or offer, promise or give any- 28 thing of value whatsoever not specified in the contract. Nor shall any 29 insured, annuitant, or policy holderpolicyholder or employee thereof, or pro- 30 spective insured, annuitant or policy holderpolicyholder, or employee 31 thereof, knowingly accept or receive, directly or indirectly, any such prohib- 32 ited contract, agreement, rebate, advantage, employment, or other inducement. 33 (2) Nothing in this section shall be construed as prohibiting the payment 34 of commissions or other compensation to duly licensed agents, solicitors, or 35 brokers, or as prohibiting any insurer from allowing or returning to its par- 36 ticipating policy holderspolicyholders, members or subscribers, the usual and 37 ordinary dividends, savings, or unabsorbed premium deposits, or as prohibiting 38 any insurer or insurance producer from providing to any policyholder or pro- 39 spective policyholder any prizes, goods, wares, merchandise, articles or prop- 40 erty of an aggregate value of fifty dollars ($50.00) or less. 41 (3) Extension of credit for the payment of premium beyond the customary 42 premium payment period without charging and collecting interest at a reason- 43 able rate per annum on the amount of credit so extended and for the duration 2 1 of such credit is prohibited under this section.
STATEMENT OF PURPOSE RS15474 Section 41-1314, Idaho Code, currently prohibits an Idaho-licensed insurance producer from offering or providing to an applicant or policyholder "anything of value" that is not specified in the insurance contract. Under its terms, this statute prohibits insurance companies and producers from giving away items to their clients if the item provided has any value, such as calendars, pens, or other such items or merchandise. However, it is current industry practice to give away such items to policyholders at no cost to the policyholder. Insurers should be permitted to provide items to their applicants and policyholders when such items have an aggregate value of fifty dollars or less. FISCAL NOTE None. Contact Name: John Mackey, United Heritage Phone: 322-2685 STATEMENT OF PURPOSE/FISCAL NOTE H 449