Idaho Code § 41-515A — Idaho Code / Title 41 / Chapter 5 / Section 41-515A
41-515A CREDIT FOR REINSURANCE PROCEDURES.
Status: in_force

41-515A. credit for reinsurance procedures. (1) The purpose of this section is to set forth procedural requirements that the director deems necessary to carry out section 41-515, Idaho Code. The actions and information required under this section are declared to be in the public interest and for the protection of the ceding insurers in this state.

(2) Reinsurer licensed in this state. Pursuant to section 41-515(2)(a), Idaho Code, the director shall allow credit for reinsurance ceded by a domestic insurer to assuming insurers that were licensed in this state as of any date on which statutory financial statement credit for reinsurance is claimed.

(3) Accredited reinsurers.

(a) Pursuant to section 41-515(2)(b), Idaho Code, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is accredited as a reinsurer in this state as of the date on which statutory financial statement credit for reinsurance is claimed. An accredited reinsurer must:

(i) File a properly executed form AR-1 as evidence of its submission to this state's jurisdiction and to this state's authority to examine its books and records;

(ii) File with the director a certified copy of a certificate of authority or other acceptable evidence that it is licensed to transact insurance or reinsurance in at least one (1) state or, in the case of a United States branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one (1) state;

(iii) File annually with the director a copy of its annual statement filed with the department of its state of domicile or, in the case of an alien assuming insurer, with the state through which it is entered and in which it is licensed to transact insurance or reinsurance, and a copy of its most recent audited financial statement; and

(iv) Maintain a surplus as regards policyholders in an amount not less than twenty million dollars ($20,000,000), or obtain the affirmative approval of the director upon a finding that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers.

(b) If the director determines that the assuming insurer has failed to meet or maintain any of these qualifications, the director may upon written notice and opportunity for hearing suspend or revoke the accreditation. Credit shall not be allowed a domestic ceding insurer under this section if the assuming insurer's accreditation has been denied or revoked by the director or if the reinsurance was ceded while the assuming insurer's accreditation was under suspension by the director after notice and hearing.

(4) Reinsurer domiciled in another state.

(a) Pursuant to section 41-515(2)(c), Idaho Code, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer, that as of any date on which statutory financial statement credit for reinsurance is claimed:

(i) Is domiciled and licensed in or, in the case of a United States branch of an alien assuming insurer, is entered through a state that employs standards regarding credit for reinsurance substantially similar to those applicable under section 41-515, Idaho Code, and this section;

(ii) Maintains a surplus as regards policyholders in an amount not less than twenty million dollars ($20,000,000); and

(iii) Files a properly executed form AR-1 with the director as evidence of its submission to this state's authority to examine its books and records.

(b) The provisions of this section relating to surplus as regards policyholders shall not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. As used in this section, "substantially similar" standards means credit for reinsurance standards that the director determines equal or exceed the standards of section 41-515, Idaho Code, and this section.

(5) Reinsurers maintaining trust funds.

(a) Pursuant to section 41-515(2)(d), Idaho Code, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that, as of any date on which statutory financial statement credit for reinsurance is claimed, and thereafter for as long as credit for reinsurance is claimed, maintains a trust fund in an amount prescribed in this subsection in a qualified United States financial institution as defined in section 41-515(4)(b), Idaho Code, for the payment of the valid claims of its United States-domiciled ceding insurers, their assigns and successors in interest. The assuming insurer shall report annually to the director substantially the same information as required to be reported on the NAIC annual statement form by licensed insurers, to enable the director to determine the sufficiency of the trust fund.

(b) The following requirements apply to the following categories of assuming insurer:

(i) The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by United States-domiciled insurers, and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than twenty million dollars ($20,000,000), except as provided in subparagraph (ii) of this paragraph.

(ii) At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three (3) full years, the director or commissioner with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of United States ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including when applicable the lines of business involved, the stability of the incurred loss estimates, and the effect of the surplus requirements on the assuming insurer's liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than thirty percent (30%) of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers covered by the trust.

(iii) The trust fund for a group including incorporated and individual unincorporated underwriters shall consist of:

1. For reinsurance ceded under reinsurance agreements with an inception, amendment, or renewal date on or after January 1, 1993, funds in trust in an amount not less than the respective underwriters' several liabilities attributable to business ceded by United States-domiciled ceding insurers to any underwriter of the group;

2. For reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of this section, funds in trust in an amount not less than the respective underwriters' several insurance and reinsurance liabilities attributable to business written in the United States; and

3. In addition to these trusts, the group shall maintain a trusteed surplus of which one hundred million dollars ($100,000,000) shall be held jointly for the benefit of the United States-domiciled ceding insurers of any member of the group for all the years of account.

(iv) The incorporated members of the group within the scope of subparagraph (iii) of this paragraph shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group's domiciliary regulator as are the unincorporated members. The group shall, within ninety (90) days after its financial statements are due to be filed with the group's domiciliary regulator, provide to the director:

1. An annual certification by the group's domiciliary regulator of the solvency of each underwriter member of the group; or

2. If a certification is unavailable, a financial statement, prepared by independent public accountants, of each underwriter member of the group.

(v) The trust fund for a group of incorporated insurers under common administration, whose members possess aggregate policyholders surplus of ten billion dollars ($10,000,000,000), calculated and reported in substantially the same manner as prescribed by the annual statement instructions and accounting practices and procedures manual of the NAIC, and which has continuously transacted an insurance business outside the United States for at least three (3) years immediately prior to making application for accreditation, shall:

1. Consist of funds in trust in an amount not less than the assuming insurers' several liabilities attributable to business ceded by United States-domiciled ceding insurers to any members of the group pursuant to reinsurance contracts issued in the name of such group;

2. Maintain a joint trusteed surplus of which one hundred million dollars ($100,000,000) shall be held jointly for the benefit of United States-domiciled ceding insurers of any member of the group; and

3. File a properly executed form AR-1 as evidence of the submission to the department's authority to examine the books and records of any of its members and shall certify that any member examined will bear the expense of any such examination.

(vi) Within ninety (90) days after the statements are due to be filed with the group's domiciliary regulator, the group shall file with the director an annual certification of each underwriter member's solvency by the member's domiciliary regulators and financial statements prepared by independent public accountants of each underwriter member of the group.

(c)(i) Credit for reinsurance shall not be granted unless the form of the trust and any amendments to the trust have been approved by either the director or commissioner of the state where the trust is domiciled or the director or commissioner of another state who, pursuant to the terms of the trust instrument, has accepted responsibility for regulatory oversight of the trust. The form of the trust and any trust amendments also shall be filed with the director and commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that:

1. Contested claims shall be valid and enforceable out of funds in trust to the extent remaining unsatisfied thirty (30) days after entry of the final order of any court of competent jurisdiction in the United States;

2. Legal title to the assets of the trust shall be vested in the trustee for the benefit of the grantor's United States ceding insurers, their assigns and successors in interest;

3. The trust shall be subject to examination as determined by the director;

4. The trust shall remain in effect for as long as the assuming insurer, or any member or former member of a group of insurers, shall have outstanding obligations under reinsurance agreements subject to the trust; and

5. No later than February 28 of each year, the trustee of the trust shall report to the director in writing setting forth the balance in the trust and listing the trust's investments at the preceding year-end and shall certify the date of termination of the trust, if so planned, or certify that the trust shall not expire prior to the following December 31.

(ii) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by this paragraph or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the director or commissioner with regulatory oversight over the trust, or with an order of a court of competent jurisdiction directing the trustee, to transfer to the director or commissioner with regulatory oversight over the trust or other designated receiver all of the assets of the trust fund.

(iii) The assets shall be distributed by and claims shall be filed with and valued by the director or commissioner with regulatory oversight over the trust in accordance with the laws of the state in which the trust is domiciled applicable to the liquidation of domestic insurance companies.

(iv) If the director or commissioner with regulatory oversight over the trust determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States beneficiaries of the trust, the director or commissioner with regulatory oversight over the trust shall return the assets, or any part thereof, to the trustee for distribution in accordance with the trust agreement.

(v) The grantor shall waive any right otherwise available to it under United States law that is inconsistent with this provision.

(d) For purposes of this subsection, "liabilities" means the assuming insurer's gross liabilities attributable to reinsurance ceded by United States-domiciled insurers, excluding liabilities that are otherwise secured by acceptable means, and shall include:

(i) For business ceded by domestic insurers authorized to write accident and health insurance and property and casualty insurance:

1. Losses and allocated loss expenses paid by the ceding insurer, recoverable from the assuming insurer;

2. Reserves for losses reported and outstanding;

3. Reserves for losses incurred but not reported;

4. Reserves for allocated loss expenses; and

5. Unearned premiums.

(ii) For business ceded by domestic insurers authorized to write life, health, and annuity insurance:

1. Aggregate reserves for life policies and contracts net of policy loans and net due and deferred premiums;

2. Aggregate reserves for accident and health policies;

3. Deposit funds and other liabilities without life or disability contingencies; and

4. Liabilities for policy and contract claims.

(e) Assets deposited in trusts established pursuant to section 41-515(2), Idaho Code, and this subsection shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in section 41-515(4)(a), Idaho Code, clean, irrevocable, unconditional, and evergreen letters of credit issued or confirmed by a qualified United States financial institution as defined in section 41-515(4)(a), Idaho Code, and investments of the type specified in this paragraph, but investments in or issued by an entity controlling, controlled by, or under common control with either the grantor or beneficiary of the trust shall not exceed five percent (5%) of total investments. No more than twenty percent (20%) of the total of the investments in the trust may be foreign investments authorized under subparagraph (i)5., (iii), (v)2., or (vi) of this paragraph, and no more than ten percent (10%) of the total of the investments in the trust may be securities denominated in foreign currencies. For purposes of applying the preceding sentence, a depository receipt denominated in United States dollars and representing rights conferred by a foreign security shall be classified as a foreign investment denominated in a foreign currency. The assets of a trust established to satisfy the requirements of section 41-515(2), Idaho Code, shall be invested only as follows:

(i) Government obligations that are not in default as to principal or interest, that are valid and legally authorized, and that are issued, assumed, or guaranteed by:

1. The United States or by any agency or instrumentality of the United States;

2. A state of the United States;

3. A territory, possession, or other governmental unit of the United States;

4. An agency or instrumentality of a governmental unit referred to in 2. and 3. of this subparagraph if the obligations shall be by law, statutory or otherwise, payable, as to both principal and interest, from taxes levied or by law required to be levied or from adequate special revenues pledged or otherwise appropriated or by law required to be provided for making these payments, but shall not be obligations eligible for investment under this paragraph if payable solely out of special assessments on properties benefited by local improvements; or

5. The government of any other country that is a member of the organization for economic cooperation and development and whose government obligations are rated A or higher, or the equivalent, by a rating agency recognized by the securities valuation office of the NAIC.

(ii) Obligations that are issued in the United States or that are dollar-denominated and issued in a non-United States market by a solvent United States institution, other than an insurance company, or that are assumed or guaranteed by a solvent United States institution, other than an insurance company, and that are not in default as to principal or interest if the obligations:

1. Are rated A or higher, or the equivalent, by a securities rating agency recognized by the securities valuation office of the NAIC or, if not so rated, are similar in structure and other material respects to other obligations of the same institution that are so rated;

2. Are insured by at least one (1) authorized insurer, other than the investing insurer or a parent, subsidiary, or affiliate of the investing insurer, licensed to insure obligations in this state and, after considering the insurance, are rated AAA, or the equivalent, by a securities rating agency recognized by the securities valuation office of the NAIC; or

3. Have been designated as class 1 or class 2 by the securities valuation office of the NAIC.

(iii) Obligations issued, assumed, or guaranteed by a solvent non-United States institution chartered in a country that is a member of the organization for economic cooperation and development or obligations of United States corporations issued in a non-United States currency, provided that in either case the obligations are rated A or higher, or the equivalent, by a rating agency recognized by the securities valuation office of the NAIC.

(iv) An investment made pursuant to the provisions of subparagraph (i), (ii), or (iii) of this paragraph shall be subject to the following additional limitations:

1. An investment in or loan upon the obligations of an institution other than an institution that issues mortgage-related securities shall not exceed five percent (5%) of the assets of the trust;

2. An investment in any one (1) mortgage-related security shall not exceed five percent (5%) of the assets of the trust;

3. The aggregate total investment in mortgage-related securities shall not exceed twenty-five percent (25%) of the assets of the trust; and

4. Preferred or guaranteed shares issued or guaranteed by a solvent United States institution are permissible investments if all of the institution's obligations are eligible as investments under subparagraph (ii)1. and 3. of this paragraph, but shall not exceed two percent (2%) of the assets of the trust.

(v) As used in this section:

1. "Mortgage-related security" means an obligation that is rated AA or higher, or the equivalent, by a securities rating agency recognized by the securities valuation office of the NAIC and that either:

(A) Represents ownership of one (1) or more promissory notes or certificates of interest or participation in the notes, including any rights designed to assure servicing of, or the receipt or timeliness of receipt by the holders of the notes, certificates, or participation of amounts payable under, the notes, certificates, or participation, that:

a. Are directly secured by a first lien on a single parcel of real estate, including stock allocated to a dwelling unit in a residential cooperative housing corporation, upon which is located a dwelling or mixed residential and commercial structure, or on a residential manufactured home as defined in 42 U.S.C. 5402(6), whether the manufactured home is considered real or personal property under the laws of the state in which it is located; and

b. Were originated by a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution that is supervised and examined by a federal or state housing authority, or by a mortgagee approved by the secretary of housing and urban development pursuant to 12 U.S.C. 1709 and 1715b, or, where the notes involve a lien on the manufactured home, by an institution or by a financial institution approved for insurance by the secretary of housing and urban development pursuant to 12 U.S.C. 1703; or

(B) Is secured by one (1) or more promissory notes or certificates of deposit or participations in the notes, with or without recourse to the insurer of the notes, and, by its terms, provides for payments of principal in relation to payments, or reasonable projections of payments, or notes meeting the requirements of items 1.(A)a. and 1.(A)b. of this subparagraph; and

2. "Promissory note," when used in connection with a manufactured home, shall also include a loan, advance, or credit sale as evidenced by a retail installment sales contract or other instrument.

(vi) Equity interests.

1. Investments in common shares or partnership interests of a solvent United States institution are permissible if:

(A) Its obligations and preferred shares, if any, are eligible as investments under this paragraph; and

(B) The equity interests of the institution, except an insurance company, are registered on a national securities exchange as provided in the securities exchange act of 1934, 15 U.S.C. 78a to 78kk or otherwise registered pursuant to that act and, if otherwise registered, price quotations for them are furnished through a nationwide automated quotations system approved by the financial industry regulatory authority, or successor organization. A trust shall not invest in equity interests under this paragraph an amount exceeding one percent (1%) of the assets of the trust even though the equity interests are not so registered and are not issued by an insurance company;

2. Investments in common shares of a solvent institution organized under the laws of a country that is a member of the organization for economic cooperation and development, if:

(A) All its obligations are rated A or higher, or the equivalent, by a rating agency recognized by the securities valuation office of the NAIC; and

(B) The equity interests of the institution are registered on a securities exchange regulated by the government of a country that is a member of the organization for economic cooperation and development.

3. An investment in or loan upon any one (1) institution's outstanding equity interests shall not exceed one percent (1%) of the assets of the trust. The cost of an investment in equity interests made pursuant to this paragraph, when added to the aggregate cost of other investments in equity interests then held pursuant to this paragraph, shall not exceed ten percent (10%) of the assets in the trust.

(vii) Obligations issued, assumed, or guaranteed by a multinational development bank, provided the obligations are rated A or higher, or the equivalent, by a rating agency recognized by the securities valuation office of the NAIC.

(viii) Investment companies.

1. Securities of an investment company registered pursuant to the investment company act of 1940, 15 U.S.C. 80a, are permissible investments if the investment company:

(A) Invests at least ninety percent (90%) of its assets in the types of securities that qualify as an investment under subparagraph (i), (ii), or (iii) of this paragraph or invests in securities that are determined by the director to be substantively similar to the types of securities set forth in subparagraph (i), (ii), or (iii) of this paragraph; or

(B) Invests at least ninety percent (90%) of its assets in the types of equity interests that qualify as an investment under subparagraph (vi)1. of this paragraph;

2. Investments made by a trust in investment companies under subparagraph (vi) of this paragraph shall not exceed the following limitations:

(A) An investment in an investment company qualifying under 1.(A) of this subparagraph shall not exceed ten percent (10%) of the assets in the trust, and the aggregate amount of investment in qualifying investment companies shall not exceed twenty-five percent (25%) of the assets in the trust; and

(B) Investments in an investment company qualifying under 1.(B) of this subparagraph shall not exceed five percent (5%) of the assets in the trust, and the aggregate amount of investment in qualifying investment companies shall be included when calculating the permissible aggregate value of equity interests pursuant to subparagraph (vi)1. of this paragraph.

(ix) Letters of credit.

1. In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the deed of trust or some other binding agreement, as duly approved by the director, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced.

2. The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct, or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances where such draw would be required shall be deemed to be negligence or willful misconduct, or both.

(f) A specific security provided to a ceding insurer by an assuming insurer pursuant to subsection (9) of this section shall be applied, until exhausted, to the payment of liabilities of the assuming insurer to the ceding insurer holding the specific security prior to, and as a condition precedent for, presentation of a claim by the ceding insurer for payment by a trustee of a trust established by the assuming insurer pursuant to this subsection.

(6) Certified reinsurers.

(a) Pursuant to section 41-515(2)(e), Idaho Code, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that has been certified as a reinsurer in this state at all times for which statutory financial statement credit for reinsurance is claimed under this subsection. The credit allowed shall be based upon the security held by or on behalf of the ceding insurer in accordance with a rating assigned to the certified reinsurer by the director. The security shall be in a form consistent with the provisions of section 41-515(2)(e), Idaho Code, and subsection (10), (11), or (12) of this section. The amount of security necessary in order for full credit to be allowed shall correspond with the following requirements:

(i)

Ratings Security Necessary Secure – 1 0% Secure – 2 10% Secure – 3 20% Secure – 4 50% Secure – 5 75% Vulnerable – 6 100%

(ii) Affiliated reinsurance transactions shall receive the same opportunity for reduced security requirements as all other reinsurance transactions.

(iii) The director shall require the certified reinsurer to post one hundred percent (100%) security, for the benefit of the ceding insurer or its estate, upon the entry of an order of rehabilitation, liquidation, or conservation against the ceding insurer.

(iv) In order to facilitate the prompt payment of claims, a certified reinsurer shall not be required to post security for catastrophe recoverables for a period of one (1) year from the date of the first instance of a liability reserve entry by the ceding company as a result of a loss from a catastrophic occurrence as recognized by the director. The one (1) year deferral period is contingent upon the certified reinsurer continuing to pay claims in a timely manner. Reinsurance recoverables for only the following lines of business as reported on the NAIC annual financial statement related specifically to the catastrophic occurrence will be included in the deferral:

1. Line 1: Fire;

2. Line 2: Allied lines;

3. Line 3: Farmowners multiple peril;

4. Line 4: Homeowners multiple peril;

5. Line 5: Commercial multiple peril;

6. Line 9: Inland marine;

7. Line 12: Earthquake; and

8. Line 21: Auto physical damage.

(v) Credit for reinsurance under this subsection shall apply only to reinsurance contracts entered into or renewed on or after the effective date of the certification of the assuming insurer. Any reinsurance contract entered into prior to the effective date of the certification of the assuming insurer that is subsequently amended after the effective date of the certification of the assuming insurer, or a new reinsurance contract, covering any risk for which collateral was provided previously, shall be subject to this subsection only with respect to losses incurred and reserves reported from and after the effective date of the amendment or new contract.

(vi) Nothing in this section shall prohibit the parties to a reinsurance agreement from agreeing to provisions establishing security requirements that exceed the minimum security requirements established for certified reinsurers under this subsection.

(b) Certification procedure.

(i) The director shall post notice on the department's website promptly upon receipt of any application for certification, including instructions on how members of the public may respond to the application. The director may not take final action on the application until at least thirty (30) days after posting the notice prescribed by this subparagraph.

(ii) The director shall issue written notice to an assuming insurer that has made application and been approved as a certified reinsurer. Included in such notice shall be the rating assigned the certified reinsurer in accordance with paragraph (a)(i) of this subsection. The director shall publish a list of all certified reinsurers and their ratings.

(iii) In order to be eligible for certification, the assuming insurer shall meet the following requirements:

1. The assuming insurer must be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the director pursuant to paragraph (c) of this subsection.

2. The assuming insurer must maintain capital and surplus, or its equivalent, of no less than two hundred fifty million dollars ($250,000,000), calculated in accordance with paragraph (b)(iv)8. of this subsection. This requirement may also be satisfied by an association including incorporated and individual unincorporated underwriters having minimum capital and surplus equivalents (net of liabilities) of at least two hundred fifty million dollars ($250,000,000) and a central fund containing a balance of at least two hundred fifty million dollars ($250,000,000).

3. The assuming insurer must maintain financial strength ratings from two (2) or more rating agencies deemed acceptable by the director. These ratings shall be based on interactive communication between the rating agency and the assuming insurer and shall not be based solely on publicly available information. These financial strength ratings will be one (1) factor used by the director in determining the rating that is assigned to the assuming insurer. Acceptable rating agencies include S&P global ratings, Moody's investors service, Fitch ratings, A.M. Best company, or any other nationally recognized statistical rating organization.

4. The certified reinsurer must comply with any other requirements reasonably imposed by the director.

(iv) Each certified reinsurer shall be rated on a legal entity basis, with due consideration being given to the group rating where appropriate, except that an association, including incorporated and individual unincorporated underwriters, that has been approved to do business as a single certified reinsurer may be evaluated on the basis of its group rating. Factors that may be considered as part of the evaluation process include but are not limited to the following:

1. The certified reinsurer's financial strength rating from an acceptable rating agency. The maximum rating that a certified reinsurer may be assigned shall correspond to its financial strength rating as outlined in the following table. The director shall use the lowest financial strength rating received from an approved rating agency in establishing the maximum rating of a certified reinsurer. A failure to obtain or maintain at least two (2) financial strength ratings from acceptable rating agencies will result in loss of eligibility for certification:

Ratings Best S&P Moody's Fitch Secure – 1 A++ AAA Aaa AAA Secure – 2 A+ AA+, AA, AA- Aa1, Aa2, Aa3 AA+, AA, AA- Secure – 3 A A+, A A1, A2 A+, A Secure – 4 A- A- A3 A- Secure – 5 B++, B+ BBB+, BBB, BBB- Baa1, Baa2, Baa3 BBB+, BBB, BBB- Vulnerable – 6 B, B-, C++, C+, C, C-, D, E, F BB+, BB, BB-, B+, B, B-, CCC, CC, C, D, R Ba1, Ba2, Ba3, B1, B2, B3, Caa, Ca, C BB+, BB, BB-, B+, B, B-, CCC+, CC, CCC-, DD

2. The business practices of the certified reinsurer in dealing with its ceding insurers, including its record of compliance with reinsurance contractual terms and obligations;

3. For certified reinsurers domiciled in the United States, a review of the most recent applicable NAIC annual statement blank, either schedule F (for property/casualty reinsurers) or schedule S (for life and health reinsurers);

4. For certified reinsurers not domiciled in the United States, a review annually of form CR-F (for property/casualty reinsurers) or form CR-S (for life and health reinsurers);

5. The reputation of the certified reinsurer for prompt payment of claims under reinsurance agreements, based on an analysis of ceding insurers' schedule F reporting of overdue reinsurance recoverables, including the proportion of obligations that are more than ninety (90) days past due or are in dispute, with specific attention given to obligations payable to companies that are in administrative supervision or receivership;

6. Regulatory actions against the certified reinsurer;

7. The report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in 8. of this subparagraph;

8. For certified reinsurers not domiciled in the United States, audited financial statements, regulatory filings, and actuarial opinion as filed with the non-United States jurisdiction supervisor, with a translation into English. Upon the initial application for certification, the director will consider audited financial statements for the last two (2) years filed with its non-United States jurisdiction supervisor;

9. The liquidation priority of obligations to a ceding insurer in the certified reinsurer's domiciliary jurisdiction in the context of an insolvency proceeding;

10. A certified reinsurer's participation in any solvent scheme of arrangement, or similar procedure, that involves United States ceding insurers. The director shall receive prior notice from a certified reinsurer that proposes participation by the certified reinsurer in a solvent scheme of arrangement; and

11. Any other information deemed relevant by the director.

(v) Based on the analysis conducted under subparagraph (iv)5. of this paragraph of a certified reinsurer's reputation for prompt payment of claims, the director may make appropriate adjustments in the security the certified reinsurer is required to post to protect its liabilities to United States ceding insurers, provided that the director shall, at a minimum, increase the security the certified reinsurer is required to post by one (1) rating level under subparagraph (iv)1. of this paragraph if the director finds that:

1. More than fifteen percent (15%) of the certified reinsurer's ceding insurance clients have overdue reinsurance recoverables on paid losses of ninety (90) days or more that are not in dispute and that exceed one hundred thousand dollars ($100,000) for each cedent; or

2. The aggregate amount of reinsurance recoverables on paid losses not in dispute overdue by ninety (90) days or more exceeds fifty million dollars ($50,000,000).

(vi) The assuming insurer must submit a properly executed form CR-1 as evidence of its submission to the jurisdiction of this state, appointment of the director as an agent for service of process in this state, and agreement to provide security for one hundred percent (100%) of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers if it resists enforcement of a final United States judgment. The director shall not certify any assuming insurer that is domiciled in a jurisdiction that the director has determined does not adequately and promptly enforce final United States judgments or arbitration awards.

(vii) The certified reinsurer must agree to meet applicable information filing requirements as determined by the director, both with respect to an initial application for certification and on an ongoing basis. All information submitted by certified reinsurers not otherwise public information subject to disclosure shall be exempt from disclosure under chapter 1, title 74, Idaho Code, and shall be withheld from public disclosure. The applicable information filing requirements are as follows:

1. Notification within ten (10) days of any regulatory actions taken against the certified reinsurer, any change in the provisions of its domiciliary license, or any change in rating by an approved rating agency, including a statement describing such changes and the reasons therefor;

2. Annually, form CR-F or CR-S as applicable per instructions adopted by the department;

3. Annually, the report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in 4. of this subparagraph;

4. Annually, the most recent audited financial statements, regulatory filings, and actuarial opinion as filed with the certified reinsurer's supervisor, with a translation into English. Upon the initial certification, audited financial statements for the last two (2) years filed with the certified reinsurer's supervisor;

5. At least annually, an updated list of all disputed and overdue reinsurance claims regarding reinsurance assumed from United States domestic ceding insurers;

6. A certification from the certified reinsurer's domestic regulator that the certified reinsurer is in good standing and maintains capital in excess of the jurisdiction's highest regulatory action level; and

7. Any other information that the director may reasonably require.

(viii) Change in rating or revocation of certification.

1. In the case of a downgrade by a rating agency or other disqualifying circumstance, the director shall upon written notice assign a new rating to the certified reinsurer in accordance with the requirements of subparagraph (iv)1. of this paragraph.

2. The director shall have the authority to suspend, revoke, or otherwise modify a certified reinsurer's certification at any time if the certified reinsurer fails to meet its obligations or security requirements under this section or if other financial or operating results of the certified reinsurer, or documented significant delays in payment by the certified reinsurer, lead the director to reconsider the certified reinsurer's ability or willingness to meet its contractual obligations.

3. If the rating of a certified reinsurer is upgraded by the director, the certified reinsurer may meet the security requirements applicable to its new rating on a prospective basis, but the director shall require the certified reinsurer to post security under the previously applicable security requirements as to all contracts in force on or before the effective date of the upgraded rating. If the rating of a certified reinsurer is downgraded by the director, the director shall require the certified reinsurer to meet the security requirements applicable to its new rating for all business it has assumed as a certified reinsurer.

4. Upon revocation of the certification of a certified reinsurer by the director, the assuming insurer shall be required to post security in accordance with subsection (9) of this section in order for the ceding insurer to continue to take credit for reinsurance ceded to the assuming insurer. If funds continue to be held in trust in accordance with subsection (5) of this section, the director may allow additional credit equal to the ceding insurer's pro rata share of such funds, discounted to reflect the risk of uncollectibility and anticipated expenses of trust administration. Notwithstanding the change of a certified reinsurer's rating or revocation of its certification, a domestic insurer that has ceded reinsurance to that certified reinsurer may not be denied credit for reinsurance for a period of three (3) months for all reinsurance ceded to that certified reinsurer, unless the reinsurance is found by the director to be at high risk of uncollectibility.

(c) Qualified jurisdictions.

(i) If, upon conducting an evaluation under this subsection with respect to the reinsurance supervisory system of any non-United States assuming insurer, the director determines that the jurisdiction qualifies to be recognized as a qualified jurisdiction, the director shall publish notice and evidence of such recognition in an appropriate manner. The director may establish a procedure to withdraw recognition of those jurisdictions that are no longer qualified.

(ii) In order to determine whether the domiciliary jurisdiction of a non-United States assuming insurer is eligible to be recognized as a qualified jurisdiction, the director shall evaluate the reinsurance supervisory system of the non-United States jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and extent of reciprocal recognition afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the United States. The director shall determine the appropriate approach for evaluating the qualifications of such jurisdictions and create and publish a list of jurisdictions whose reinsurers may be approved by the director as eligible for certification. A qualified jurisdiction must agree to share information and cooperate with the director with respect to all certified reinsurers domiciled within that jurisdiction. Additional factors to be considered in determining whether to recognize a qualified jurisdiction, in the discretion of the director, include but are not limited to the following:

1. The framework under which the assuming insurer is regulated;

2. The structure and authority of the domiciliary regulator with regard to solvency regulation requirements and financial surveillance;

3. The substance of financial and operating standards for assuming insurers in the domiciliary jurisdiction;

4. The form and substance of financial reports required to be filed or made publicly available by reinsurers in the domiciliary jurisdiction and the accounting principles used;

5. The domiciliary regulator's willingness to cooperate with United States regulators in general and the director in particular;

6. The history of performance by assuming insurers in the domiciliary jurisdiction;

7. Any documented evidence of substantial problems with the enforcement of final United States judgments in the domiciliary jurisdiction. A jurisdiction will not be considered to be a qualified jurisdiction if the director has determined that it does not adequately and promptly enforce final United States judgments or arbitration awards;

8. Any relevant international standards or guidance with respect to mutual recognition of reinsurance supervision adopted by the international association of insurance supervisors or its successor organization; and

9. Any other matters deemed relevant by the director.

(iii) A list of qualified jurisdictions shall be published through the NAIC committee process. The director shall consider this list in determining qualified jurisdictions. If the director approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the director shall provide thoroughly documented justification with respect to the criteria provided under subparagraph (ii) of this paragraph.

(iv) United States jurisdictions that meet the requirements for accreditation under the NAIC financial standards and accreditation program shall be recognized as qualified jurisdictions.

(d) Recognition of certification issued by an NAIC-accredited jurisdiction.

(i) If an applicant for certification has been certified as a reinsurer in an NAIC-accredited jurisdiction, the director has the discretion to defer to that jurisdiction's certification, and to defer to the rating assigned by that jurisdiction, if the assuming insurer submits a properly executed form CR-1 and such additional information as the director requires. The assuming insurer shall be considered to be a certified reinsurer in this state.

(ii) Any change in the certified reinsurer's status or rating in the other jurisdiction shall apply automatically in this state as of the date it takes effect in the other jurisdiction. The certified reinsurer shall notify the director of any change in its status or rating within ten (10) days after receiving notice of the change.

(iii) The director may withdraw recognition of the other jurisdiction's rating at any time and assign a new rating in accordance with paragraph (b)(viii) of this subsection.

(iv) The director may withdraw recognition of the other jurisdiction's certification at any time, with written notice to the certified reinsurer. Unless the director suspends or revokes the certified reinsurer's certification in accordance with paragraph (b)(viii) of this subsection, the certified reinsurer's certification shall remain in good standing in this state for a period of three (3) months, which shall be extended if additional time is necessary to consider the assuming insurer's application for certification in this state.

(e) Mandatory funding clause. In addition to the clauses required under subsection (13) of this section, reinsurance contracts entered into or renewed under this section shall include a proper funding clause, which requires the certified reinsurer to provide and maintain security in an amount sufficient to avoid the imposition of any financial statement penalty on the ceding insurer under this section for reinsurance ceded to the certified reinsurer.

(f) The director shall comply with all reporting and notification requirements that may be established by the NAIC with respect to certified reinsurers and qualified jurisdictions.

(7) Reciprocal jurisdictions.

(a) Pursuant to section 41-515(2)(f), Idaho Code, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer licensed to write reinsurance by, and has its head office or is domiciled in, a reciprocal jurisdiction and that meets the other requirements of this section.

(b) A reciprocal jurisdiction is a jurisdiction, as designated by the director pursuant to paragraph (d) of this subsection, that meets one (1) of the following:

(i) A non-United States jurisdiction that is subject to an in-force covered agreement with the United States, each within its legal authority, or, in the case of a covered agreement between the United States and the European Union, is a member state of the European Union. For purposes of this paragraph, a covered agreement is an agreement entered into pursuant to the Dodd-Frank Wall Street reform and consumer protection act, 31 U.S.C. 313 and 314, that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance;

(ii) A United States jurisdiction that meets the requirements for accreditation under the NAIC financial standards and accreditation program; or

(iii) A qualified jurisdiction, as determined by the director pursuant to section 41-515(2)(e)(iii), Idaho Code, and subsection (6)(c) of this section, that is not otherwise described in subparagraph (i) or (ii) of this paragraph and that the director determines meets all of the following additional requirements:

1. Provides that an insurer that has its head office or is domiciled in such qualified jurisdiction shall receive credit for reinsurance ceded to a United States-domiciled assuming insurer in the same manner as credit for reinsurance is received for reinsurance assumed by insurers domiciled in such qualified jurisdiction;

2. Does not require a United States-domiciled assuming insurer to establish or maintain a local presence as a condition for entering into a reinsurance agreement with any ceding insurer subject to regulation by the non-United States jurisdiction or as a condition to allow the ceding insurer to recognize credit for such reinsurance;

3. Recognizes the United States state regulatory approach to group supervision and group capital, by providing written confirmation by a competent regulatory authority, in such qualified jurisdiction, that insurers and insurance groups that are domiciled or maintain their headquarters in this state or another jurisdiction accredited by the NAIC shall be subject only to worldwide prudential insurance group supervision, including worldwide group governance, solvency, and capital, and reporting, as applicable, by the director or the commissioner of the domiciliary state and will not be subject to group supervision at the level of the worldwide parent undertaking of the insurance or reinsurance group by the qualified jurisdiction; and

4. Provides written confirmation by a competent regulatory authority in such qualified jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the director in accordance with a memorandum of understanding or similar document between the director and such qualified jurisdiction, including but not limited to the international association of insurance supervisors multilateral memorandum of understanding or other multilateral memoranda of understanding coordinated by the NAIC.

(c) Credit shall be allowed when the reinsurance is ceded from an insurer domiciled in this state to an assuming insurer meeting each of the following conditions:

(i) The assuming insurer must be licensed to transact reinsurance by, and have its head office or be domiciled in, a reciprocal jurisdiction.

(ii) The assuming insurer must have and maintain on an ongoing basis minimum capital and surplus, or its equivalent, calculated on at least an annual basis as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, and confirmed as set forth in subparagraph (vii) of this paragraph according to the methodology of its domiciliary jurisdiction, in the following amounts:

1. No less than two hundred fifty million dollars ($250,000,000); or

2. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters:

(A) Minimum capital and surplus equivalents (net of liabilities) or own funds of the equivalent of at least two hundred fifty million dollars ($250,000,000); and

(B) A central fund containing a balance of the equivalent of at least two hundred fifty million dollars ($250,000,000).

(iii) The assuming insurer must have and maintain on an ongoing basis a minimum solvency or capital ratio, as applicable, as follows:

1. If the assuming insurer has its head office or is domiciled in a reciprocal jurisdiction as defined in paragraph (b)(i) of this subsection, the ratio specified in the applicable covered agreement;

2. If the assuming insurer is domiciled in a reciprocal jurisdiction as defined in paragraph (b)(ii) of this subsection, a risk-based capital (RBC) ratio of three hundred percent (300%) of the authorized control level, calculated in accordance with the formula developed by the NAIC; or

3. If the assuming insurer is domiciled in a reciprocal jurisdiction as defined in paragraph (b)(iii) of this subsection, after consultation with the reciprocal jurisdiction and considering any recommendations published through the NAIC committee process, such solvency or capital ratio as the director determines to be an effective measure of solvency.

(iv) The assuming insurer must agree to and provide adequate assurance, in the form of a properly executed form RJ-1, of its agreement to the following:

1. The assuming insurer must agree to provide prompt written notice and explanation to the director if it falls below the minimum requirements set forth in subparagraph (ii) or (iii) of this paragraph or if any regulatory action is taken against it for serious noncompliance with applicable law.

2. The assuming insurer must consent in writing to the jurisdiction of the courts of this state and to the appointment of the director as agent for service of process.

(A) The director may also require that such consent be provided and included in each reinsurance agreement under the director's jurisdiction.

(B) Nothing in this provision shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such agreements are unenforceable under applicable insolvency or delinquency laws.

3. The assuming insurer must consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer that have been declared enforceable in the territory where the judgments were obtained.

4. Each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to one hundred percent (100%) of the assuming insurer's liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its estate, if applicable.

5. The assuming insurer must confirm that it is not presently participating in any solvent scheme of arrangement that involves this state's ceding insurers and agrees to notify the ceding insurer and the director and to provide one hundred percent (100%) security to the ceding insurer consistent with the terms of the scheme, should the assuming insurer enter into such a solvent scheme of arrangement. Such security shall be in a form consistent with the provisions of section 41-515(2)(e) and (3), Idaho Code, and subsections (10) through (12) of this section. For purposes of this section, the term "solvent scheme of arrangement" means a foreign or alien statutory or regulatory compromise procedure subject to requisite majority creditor approval and judicial sanction in the assuming insurer's home jurisdiction either to finally commute liabilities of duly noticed classed members or creditors of a solvent debtor or to reorganize or restructure the debts and obligations of a solvent debtor on a final basis, which may be subject to judicial recognition and enforcement of the arrangement by a governing authority outside the ceding insurer's home jurisdiction.

6. The assuming insurer must agree in writing to meet the applicable information filing requirements as set forth in subparagraph (v) of this paragraph.

(v) The assuming insurer or its legal successor must provide, if requested by the director, on behalf of itself and any legal predecessors, the following documentation to the director:

1. For the two (2) years preceding entry into the reinsurance agreement and on an annual basis thereafter, the assuming insurer's annual audited financial statements, in accordance with the applicable law of the jurisdiction of its head office or domiciliary jurisdiction, as applicable, including the external audit report;

2. For the two (2) years preceding entry into the reinsurance agreement, the solvency and financial condition report or actuarial opinion, if filed with the assuming insurer's supervisor;

3. Prior to entry into the reinsurance agreement and not more than semiannually thereafter, an updated list of all disputed and overdue reinsurance claims outstanding for ninety (90) days or more regarding reinsurance assumed from ceding insurers domiciled in the United States; and

4. Prior to entry into the reinsurance agreement and not more than semiannually thereafter, information regarding the assuming insurer's assumed reinsurance by ceding insurer, ceded reinsurance by the assuming insurer, and reinsurance recoverable on paid and unpaid losses by the assuming insurer to allow for the evaluation of the criteria set forth in subparagraph (vi) of this paragraph.

(vi) The assuming insurer must maintain a practice of prompt payment of claims under reinsurance agreements. The lack of prompt payment will be evidenced if any of the following criteria are met:

1. More than fifteen percent (15%) of the reinsurance recoverables from the assuming insurer are overdue and in dispute as reported to the director;

2. More than fifteen percent (15%) of the assuming insurer's ceding insurers or reinsurers have overdue reinsurance recoverable on paid losses of ninety (90) days or more that are not in dispute and that exceed for each ceding insurer one hundred thousand dollars ($100,000), or as otherwise specified in a covered agreement; or

3. The aggregate amount of reinsurance recoverable on paid losses that are not in dispute, but are overdue by ninety (90) days or more, exceeds fifty million dollars ($50,000,000), or as otherwise specified in a covered agreement.

(vii) The assuming insurer's supervisory authority must confirm to the director on an annual basis that the assuming insurer complies with the requirements set forth in subparagraphs (ii) and (iii) of this paragraph.

(viii) Nothing in this provision precludes an assuming insurer from providing the director with information on a voluntary basis.

(d) The director shall timely create and publish a list of reciprocal jurisdictions.

(i) A list of reciprocal jurisdictions is published through the NAIC committee process. The director's list shall include any reciprocal jurisdiction as defined under paragraph (b)(i) and (ii) of this subsection and shall consider any other reciprocal jurisdiction included on the NAIC list. The director may approve a jurisdiction that does not appear on the NAIC list of reciprocal jurisdictions as provided by applicable law or rule or in accordance with criteria published through the NAIC committee process.

(ii) The director may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets one (1) or more of the requirements of a reciprocal jurisdiction, as provided by applicable law or rule or in accordance with a process published through the NAIC committee process, except that the director shall not remove from the list a reciprocal jurisdiction as described under paragraph (b)(i) and (ii) of this subsection. Upon removal of a reciprocal jurisdiction from this list, credit for reinsurance ceded to an assuming insurer domiciled in that jurisdiction shall be allowed, if otherwise allowed pursuant to section 41-515, Idaho Code, or this section.

(e) The director shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this section and to which cessions shall be granted credit in accordance with this section.

(i) If an NAIC-accredited jurisdiction has determined that the conditions set forth in paragraph (c) of this subsection have been met, the director has the discretion to defer to that jurisdiction's determination and to add such assuming insurer to the list of assuming insurers to which cessions shall be granted credit in accordance with this paragraph. The director may accept financial documentation filed with another NAIC-accredited jurisdiction or with the NAIC in satisfaction of the requirements of paragraph (c) of this subsection.

(ii) When requesting that the director defer to another NAIC-accredited jurisdiction's determination, an assuming insurer must submit a properly executed form RJ-1 and additional information as the director may require. A state that has received such a request shall notify other states through the NAIC committee process and provide relevant information with respect to the determination of eligibility.

(f) If the director determines that an assuming insurer no longer meets one (1) or more of the requirements under this subsection, the director may revoke or suspend the eligibility of the assuming insurer for recognition under this subsection.

(i) While an assuming insurer's eligibility is suspended, no reinsurance agreement issued, amended, or renewed after the effective date of the suspension qualifies for credit except to the extent that the assuming insurer's obligations under the contract are secured in accordance with subsection (9) of this section.

(ii) If an assuming insurer's eligibility is revoked, no credit for reinsurance may be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that the assuming insurer's obligations under the contract are secured in a form acceptable to the director and consistent with the provisions of subsection (9) of this section.

(g) Before denying statement credit or imposing a requirement to post security with respect to paragraph (f) of this subsection, or adopting any similar requirement that will have substantially the same regulatory impact as security, the director shall:

(i) Communicate with the ceding insurer, the assuming insurer, and the assuming insurer's supervisory authority that the assuming insurer no longer satisfies any of the conditions listed in paragraph (c) of this subsection;

(ii)1. Provide the assuming insurer with thirty (30) days from the initial communication to submit a plan to remedy the defect, and ninety (90) days from the initial communication to remedy the defect, except in exceptional circumstances in which a shorter period is necessary for policyholder and other consumer protection.

2. After the expiration of ninety (90) days or less, as set out in 1. of this subparagraph, if the director determines that no or insufficient action was taken by the assuming insurer, the director may impose any of the requirements as set out in this paragraph; and

(iii) Provide a written explanation to the assuming insurer of any of the requirements set out in this subsection.

(h) If subject to a legal process of rehabilitation, liquidation, or conservation, as applicable, the ceding insurer or its representative may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding liabilities.

(8) Credit for reinsurance required by law. Pursuant to section 41-515(2)(g), Idaho Code, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of section 41-515(2)(a), (b), (c), (d), (e), or (f), Idaho Code, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by the applicable law or regulation of that jurisdiction. As used in this subsection, the term "jurisdiction" means a state, district, or territory of the United States and any lawful national government.

(9) Asset or reduction from liability for reinsurance ceded to an unauthorized assuming insurer not meeting the requirements of subsections (2) through (8) of this section.

(a) Pursuant to section 41-515(3), Idaho Code, the director shall allow a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of section 41-515(2), Idaho Code, in an amount not exceeding the liabilities carried by the ceding insurer. The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the exclusive benefit of the ceding insurer, under a reinsurance contract with such assuming insurer as security for the payment of obligations under the reinsurance contract. The security shall be held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer or, in the case of a trust, held in a qualified United States financial institution as defined in section 41-515(4)(b), Idaho Code. This security may be in the form of any of the following:

(i) Cash;

(ii) Securities listed by the securities valuation office of the NAIC, including those deemed exempt from filing as defined by the purposes and procedures manual of the securities valuation office, and qualifying as admitted assets;

(iii) Clean, irrevocable, unconditional, and evergreen letters of credit issued or confirmed by a qualified United States institution, as defined in section 41-515(4)(a), Idaho Code, effective no later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement. Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or

(iv) Any other form of security acceptable to the director.

(b) An admitted asset or a reduction from liability for reinsurance ceded to an unauthorized assuming insurer pursuant to this section shall be allowed only when the requirements of subsection (13) of this section and the applicable portions of subsection (10), (11), or (12) of this section have been satisfied.

(10) Trust agreements qualified under subsection (9) of this section.

(a) As used in this subsection:

(i) "Beneficiary" means the entity for whose sole benefit the trust has been established and any successor of the beneficiary by operation of law. If a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary includes and is limited to the court-appointed domiciliary receiver, including conservator, rehabilitator, or liquidator.

(ii) "Grantor" means the entity that has established a trust for the sole benefit of the beneficiary. When established in conjunction with a reinsurance agreement, the grantor is the unlicensed, unaccredited assuming insurer.

(iii) "Obligations," as used in paragraph (b)(xi) of this subsection, means:

1. Reinsured losses and allocated loss expenses paid by the ceding company but not recovered from the assuming insurer;

2. Reserves for reinsured losses reported and outstanding;

3. Reserves for reinsured losses incurred but not reported; and

4. Reserves for allocated reinsured loss expenses and unearned premiums.

(b) Required conditions.

(i) The trust agreement shall be entered into between the beneficiary, the grantor, and a trustee, which shall be a qualified United States financial institution as defined in section 41-515(4)(b), Idaho Code.

(ii) The trust agreement shall create a trust account into which assets shall be deposited.

(iii) All assets in the trust account shall be held by the trustee at the trustee's office in the United States.

(iv) The trust agreement shall provide that:

1. The beneficiary shall have the right to withdraw assets from the trust account at any time, without notice to the grantor, subject only to written notice from the beneficiary to the trustee;

2. No other statement or document is required to be presented to withdraw assets, except that the beneficiary may be required to acknowledge receipt of withdrawn assets;

3. It is not subject to any conditions or qualifications outside of the trust agreement; and

4. It shall not contain references to any other agreements or documents except as provided for in subparagraphs (xi) and (xii) of this paragraph.

(v) The trust agreement shall be established for the sole benefit of the beneficiary.

(vi) The trust agreement shall require the trustee to:

1. Receive assets and hold all assets in a safe place;

2. Determine that all assets are in such form that the beneficiary, or the trustee upon direction by the beneficiary, may whenever necessary negotiate any such assets without consent or signature from the grantor or any other person or entity;

3. Furnish to the grantor and the beneficiary a statement of all assets in the trust account upon its inception and at intervals no less frequent than the end of each calendar quarter;

4. Notify the grantor and the beneficiary within ten (10) days of any deposits to or withdrawals from the trust account;

5. Upon written demand of the beneficiary, immediately take any and all steps necessary to transfer absolutely and unequivocally all right, title, and interest in the assets held in the trust account to the beneficiary and deliver physical custody of the assets to the beneficiary; and

6. Allow no substitutions or withdrawals of assets from the trust account, except on written instructions from the beneficiary, except that the trustee may, without the consent of but with notice to the beneficiary, upon call or maturity of any trust asset, withdraw such asset upon condition that the proceeds are paid into the trust account.

(vii) The trust agreement shall provide that at least thirty (30) days, but not more than forty-five (45) days, prior to termination of the trust account written notification of termination shall be delivered by the trustee to the beneficiary.

(viii) The trust agreement shall be made subject to and governed by the laws of the state in which the trust is domiciled.

(ix) The trust agreement shall prohibit invasion of the trust corpus for the purpose of paying commission to, or reimbursing the expenses of, the trustee. In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the deed of trust or some other binding agreement, as duly approved by the director, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced.

(x) The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct, or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances where such draw would be required shall be deemed to be negligence or willful misconduct, or both.

(xi) Notwithstanding other provisions of this section, when a trust agreement is established in conjunction with a reinsurance agreement covering risks other than life, annuities, and accident and health, where it is customary practice to provide a trust agreement for a specific purpose, the trust agreement may provide that the ceding insurer shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, only for the following purposes:

1. To pay or reimburse the ceding insurer for the assuming insurer's share under the specific reinsurance agreement regarding any losses and allocated loss expenses paid by the ceding insurer, but not recovered from the assuming insurer, or for unearned premiums due to the ceding insurer if not otherwise paid by the assuming insurer;

2. To make payment to the assuming insurer of any amounts held in the trust account that exceed one hundred two percent (102%) of the actual amount required to fund the assuming insurer's obligations under the specific reinsurance agreement; or

3. Where the ceding insurer has received notification of termination of the trust account and where the assuming insurer's entire obligations under the specific reinsurance agreement remain unliquidated and undischarged ten (10) days prior to the termination date, to withdraw amounts equal to the obligations and deposit those amounts in a separate account, in the name of the ceding insurer in any qualified United States financial institution as defined in section 41-515(4)(b), Idaho Code, apart from its general assets, in trust for such uses and purposes specified in 1. and 2. of this subparagraph as may remain executory after such withdrawal and for any period after the termination date.

(xii) Notwithstanding other provisions of this section, when a trust agreement is established to meet the requirements of subsection (9) of this section in conjunction with a reinsurance agreement covering life, annuities, or accident and health risks, where it is customary to provide a trust agreement for a specific purpose, the trust agreement may provide that the ceding insurer shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, only for the following purposes:

1. To pay or reimburse the ceding insurer for:

(A) The assuming insurer's share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance agreement on account of cancellations of the policies; and

(B) The assuming insurer's share under the specific reinsurance agreement of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurer, under the terms and provisions of the policies reinsured under the reinsurance agreement;

2. To pay to the assuming insurer amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer; or

3. Where the ceding insurer has received notification of termination of the trust and where the assuming insurer's entire obligations under the specific reinsurance agreement remain unliquidated and undischarged ten (10) days prior to the termination date, to withdraw amounts equal to the assuming insurer's share of liabilities, to the extent that the liabilities have not yet been funded by the assuming insurer, and deposit those amounts in a separate account, in the name of the ceding insurer in any qualified United States financial institution apart from its general assets, in trust for the uses and purposes specified in 1. and 2. of this subparagraph as may remain executory after withdrawal and for any period after the termination date.

(xiii) Either the reinsurance agreement or the trust agreement must stipulate that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States bank and payable in United States dollars, and investments permitted by this title of the Idaho Code, or any combination thereof, provided investments in or issued by an entity controlling, controlled by, or under common control with either the grantor or the beneficiary of the trust shall not exceed five percent (5%) of total investments. The agreement may further specify the types of investments to be deposited. If the reinsurance agreement covers life, annuities, or accident and health risks, then the provisions required by this subparagraph must be included in the reinsurance agreement.

(c) Permitted conditions.

(i) The trust agreement may provide that the trustee may resign upon delivery of a written notice of resignation, effective not less than ninety (90) days after the beneficiary and grantor receive the notice, and that the trustee may be removed by the grantor by delivery to the trustee and the beneficiary of a written notice of removal, effective not less than ninety (90) days after the trustee and the beneficiary receive the notice, provided that no such resignation or removal shall be effective until a successor trustee has been duly appointed and approved by the beneficiary and the grantor and all assets in the trust have been duly transferred to the new trustee.

(ii) The grantor may have the full and unqualified right to vote any shares of stock in the trust account and to receive from time to time payments of any dividends or interest upon any shares of stock or obligations included in the trust account. Any interest or dividends shall be either forwarded promptly upon receipt to the grantor or deposited in a separate account established in the grantor's name.

(iii) The trustee may be given authority to invest, and accept substitutions of, any funds in the account, provided that no investment or substitution shall be made without prior approval of the beneficiary, unless the trust agreement specifies categories of investments acceptable to the beneficiary and authorizes the trustee to invest funds and to accept substitutions that the trustee determines are at least equal in current fair market value to the assets withdrawn and that are consistent with the restrictions in paragraph (d)(i)2. of this subsection.

(iv) The trust agreement may provide that the beneficiary may at any time designate a party to which all or part of the trust assets are to be transferred. Transfer may be conditioned upon the trustee receiving, prior to or simultaneously, other specified assets.

(v) The trust agreement may provide that, upon termination of the trust account, all assets not previously withdrawn by the beneficiary shall, with written approval by the beneficiary, be delivered over to the grantor.

(d) Additional conditions applicable to reinsurance agreements.

(i) A reinsurance agreement may contain provisions that:

1. Require the assuming insurer to enter into a trust agreement and to establish a trust account for the benefit of the ceding insurer, specifying what the agreement is to cover;

2. Require the assuming insurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations, or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may whenever necessary negotiate these assets without consent or signature from the assuming insurer or any other entity;

3. Require that all settlements of account between the ceding insurer and the assuming insurer be made in cash or its equivalent; and

4. Stipulate that the assuming insurer and the ceding insurer agree that the assets in the trust account, established pursuant to the provisions of the reinsurance agreement, may be withdrawn by the ceding insurer at any time, notwithstanding any other provisions in the reinsurance agreement, and shall be utilized and applied by the ceding insurer or its successors in interest by operation of law, including without limitation any liquidator, rehabilitator, receiver, or conservator of such company, without diminution because of insolvency on the part of the ceding insurer or the assuming insurer, only for the following purposes:

(A) To pay or reimburse the ceding insurer for:

a. The assuming insurer's share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance agreement because of cancellations of such policies;

b. The assuming insurer's share of surrenders and benefits or losses paid by the ceding insurer pursuant to the provisions of the policies reinsured under the reinsurance agreement; and

c. Any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer; and

(B) To make payment to the assuming insurer of amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer.

(ii) The reinsurance agreement also may contain provisions that:

1. Give the assuming insurer the right to seek approval from the ceding insurer, which shall not be unreasonably or arbitrarily withheld, to withdraw from the trust account all or any part of the trust assets and transfer those assets to the assuming insurer, provided:

(A) The assuming insurer shall, at the time of withdrawal, replace the withdrawn assets with other qualified assets having a current fair market value equal to the market value of the assets withdrawn so as to maintain at all times the deposit in the required amount; or

(B) After withdrawal and transfer, the current fair market value of the trust account is no less than one hundred two percent (102%) of the required amount.

2. Provide for the return of any amount withdrawn in excess of the actual amounts required for subparagraph (i)4. of this paragraph and for interest payments at a rate not in excess of the prime rate of interest on such amounts;

3. Permit the award by any arbitration panel or court of competent jurisdiction of:

(A) Interest at a rate different from that provided in 2. of this subparagraph;

(B) Court or arbitration costs;

(C) Attorney's fees; and

(D) Any other reasonable expenses.

(e) Financial reporting. A trust agreement may be used to reduce any liability for reinsurance ceded to an unauthorized assuming insurer in financial statements required to be filed with this department in compliance with the provisions of this section when established on or before the date of filing of the financial statement of the ceding insurer. Further, the reduction for the existence of an acceptable trust account may be up to the current fair market value of acceptable assets available to be withdrawn from the trust account at that time, but such reduction shall be no greater than the specific obligations under the reinsurance agreement that the trust account was established to secure.

(f) Existing agreements. Notwithstanding the effective date of this section, any trust agreement or underlying reinsurance agreement in existence prior to July 1, 2021, will continue to be acceptable until July 1, 2022, at which time such agreement will have to fully comply with this section for the trust agreement to be acceptable.

(g) The failure of any trust agreement to specifically identify the beneficiary as defined in paragraph (a) of this subsection shall not be construed to affect any actions or rights that the director may take or possess pursuant to the provisions of the laws of this state.

(11) Letters of credit qualified under subsection (9) of this section.

(a) The letter of credit must be clean, irrevocable, unconditional, and issued or confirmed by a qualified United States financial institution as defined in section 41-515(4)(a), Idaho Code. The letter of credit shall contain an issue date and expiration date and shall stipulate that the beneficiary need only draw a sight draft under the letter of credit and present it to obtain funds and that no other document need be presented. The letter of credit also shall indicate that it is not subject to any conditions or qualifications outside of the letter of credit. In addition, the letter of credit itself shall not contain reference to any other agreements, documents, or entities, except as provided in paragraph (h)(i) of this subsection. As used in this subsection, "beneficiary" means the domestic insurer for whose benefit the letter of credit has been established and any successor of the beneficiary by operation of law. If a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary includes and is limited to the court-appointed domiciliary receiver, including conservator, rehabilitator, or liquidator.

(b) The heading of the letter of credit may include a boxed section containing the name of the applicant and other appropriate notations to provide a reference for the letter of credit. The boxed section shall be clearly marked to indicate that such information is for internal identification purposes only.

(c) The letter of credit shall contain a statement to the effect that the obligation of the qualified United States financial institution under the letter of credit is in no way contingent upon reimbursement with respect thereto.

(d) The term of the letter of credit shall be for at least one (1) year and shall contain an evergreen clause that prevents the expiration of the letter of credit without due notice from the issuer. The evergreen clause shall provide for a period of no less than thirty (30) days' notice prior to its expiration date or nonrenewal.

(e) The letter of credit shall state whether it is subject to and governed by the laws of this state or the uniform customs and practice for documentary credits of the international chamber of commerce publication 600 (UCP 600) or international standby practices of the international chamber of commerce publication 590 (ISP98), or any successor publication, and all drafts drawn thereunder shall be presentable at an office in the United States of a qualified United States financial institution.

(f) If the letter of credit is made subject to the uniform customs and practice for documentary credits of the international chamber of commerce publication 600 (UCP 600) or international standby practices of the international chamber of commerce publication 590 (ISP98), or any successor publication, then the letter of credit shall specifically address and provide for an extension of time to draw against the letter of credit in the event that one (1) or more of the occurrences specified in article 36 of UCP 600 or any other successor publication occur.

(g) If the letter of credit is issued by a financial institution authorized to issue letters of credit, other than a qualified United States financial institution as described in paragraph (a) of this subsection, then the following additional requirements shall be met:

(i) The issuing financial institution shall formally designate the confirming qualified United States financial institution as its agent for the receipt and payment of the drafts; and

(ii) The evergreen clause shall provide for thirty (30) days' notice prior to its expiration date or nonrenewal.

(h) Reinsurance agreement provisions.

(i) The reinsurance agreement in conjunction with which the letter of credit is obtained may contain provisions that:

1. Require the assuming insurer to provide letters of credit to the ceding insurer and specify what they are to cover;

2. Stipulate that the assuming insurer and ceding insurer agree that the letter of credit provided by the assuming insurer pursuant to the provisions of the reinsurance agreement may be drawn upon at any time, notwithstanding any other provisions in the agreement, and shall be utilized by the ceding insurer or its successors in interest only for one (1) or more of the following reasons:

(A) To pay or reimburse the ceding insurer for:

a. The assuming insurer's share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurers, to the owners of policies reinsured under the reinsurance agreement on account of cancellations of such policies;

b. The assuming insurer's share, under the specific reinsurance agreement, of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurers, under the terms and provisions of the policies reinsured under the reinsurance agreement; and

c. Any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer;

(B) Where the letter of credit will expire without renewal or be reduced or replaced by a letter of credit for a reduced amount and where the assuming insurer's entire obligations under the reinsurance agreement remain unliquidated and undischarged ten (10) days prior to the termination date, to withdraw amounts equal to the assuming insurer's share of the liabilities, to the extent that the liabilities have not yet been funded by the assuming insurer and exceed the amount of any reduced or replacement letter of credit, and deposit those amounts in a separate account in the name of the ceding insurer in a qualified United States financial institution apart from its general assets, in trust for such uses and purposes specified in 2.(A) of this subparagraph as may remain after withdrawal and for any period after the termination date.

(C) All of the provisions of this subparagraph shall be applied without diminution because of insolvency on the part of the ceding insurer or assuming insurer.

(ii) Nothing contained in subparagraph (i) of this paragraph shall preclude the ceding insurer and assuming insurer from providing for:

1. An interest payment, at a rate not in excess of the prime rate of interest, on the amounts held pursuant to subparagraph (i)2. of this paragraph; or

2. The return of any amounts drawn down on the letters of credit in excess of the actual amounts specified in this paragraph or any amounts that are subsequently determined not to be due.

(12) Other security. A ceding insurer may take credit for unencumbered funds withheld by the ceding insurer in the United States subject to withdrawal solely by the ceding insurer and under its exclusive control.

(13) Reinsurance contract. Credit shall not be granted, and an asset or reduction from liability shall not be allowed, to a ceding insurer for reinsurance effected with assuming insurers meeting the requirements of subsection (2), (3), (4), (5), (6), (7), or (9) of this section or otherwise in compliance with section 41-515(2), Idaho Code, after the adoption of this section unless the reinsurance agreement:

(a) Includes a proper insolvency clause that stipulates reinsurance is payable directly to the liquidator or successor without diminution regardless of the status of the ceding company, pursuant to chapter 33 of this title;

(b) Includes a provision pursuant to section 41-515(2), Idaho Code, whereby the assuming insurer, if an unauthorized assuming insurer, has submitted to the jurisdiction of an alternative dispute resolution panel or court of competent jurisdiction within the United States, has agreed to comply with all requirements necessary to give the court or panel jurisdiction, has designated an agent upon whom service of process may be effected, and has agreed to abide by the final decision of the court or panel; and

(c) Includes a proper reinsurance intermediary clause, if applicable, that stipulates the credit risk for the intermediary is carried by the assuming insurer.

(14) Contracts affected. All new and renewal reinsurance transactions entered into after the adoption of this section shall conform to the requirements of this section if credit is to be given to the ceding insurer for such reinsurance. Consistent with NAIC model regulation 786, various forms have been adopted and need to be received by the department to be compliant with this statute, including forms AR-1, CR-1, RJ-1, CR-F, and CR-S. These forms can be obtained from the department's website.

History:

[41-515A, added 2021, ch. 67, sec. 2, p. 220.]
Idaho Code § 41-1819 — Idaho Code / Title 41 / Chapter 18 / Section 41-1819
41-1819 EXECUTION OF POLICIES.
Status: in_force

41-1819. Execution of policies. (1) Every insurance policy shall be executed in the name of and on behalf of the insurer by its officer, attorney in fact, employee, or representative duly authorized by the insurer.

(2) A facsimile signature of any such executing individual may be used in lieu of an original signature.

(3) No insurance contract heretofore or hereafter issued and which is otherwise valid shall be rendered invalid by reason of the apparent execution thereof on behalf of the insurer by the imprinted facsimile signature of an individual not authorized so to execute as of the date of the policy.

History:

[41-1819, added 1961, ch. 330, sec. 411, p. 645.]
Idaho Code § 41-4903 — Idaho Code / Title 41 / Chapter 49 / Section 41-4903
41-4903 DEFINITIONS.
Status: in_force

41-4903. Definitions. For the purposes of this chapter:

(1) "Aboveground storage tank" means any one (1) or a combination of tanks, including pipes connected thereto, that is used to contain an accumulation of petroleum or petroleum products, and the volume of which, including the volume of pipes connected thereto, is less than ten percent (10%) beneath the surface of the ground. This term does not include a heating tank, farm tank or residential tank or any tank with a capacity of one hundred ten (110) gallons or less.

(2) "Accidental release" means any sudden or nonsudden release of petroleum from a storage tank that results in a need for corrective action or compensation for bodily injury or property damage neither expected nor intended by the tank owner or operator.

(3) "Administrator" means the state insurance fund or any person employed by the board of trustees to replace the state insurance fund, employed by the board to administer the Idaho petroleum clean water trust fund.

(4) "Application fee" means the amount paid or payable by an owner or operator applying for a contract of insurance with the trust fund to offset the costs of issuing contracts of insurance and other costs of administering this fund.

(5) "Board" means the board of trustees appointed by the governor.

(6) "Bodily injury" means any bodily injury, sickness, disease or death sustained by any person and caused by an occurrence defined in subsection (19) of this section.

(7) "Contamination" means the presence of petroleum or petroleum products in surface or subsurface soil, surface water, or ground water.

(8) "Commission" means the state tax commission of the state of Idaho.

(9) "Corrective action" means those actions as are reasonably necessary to satisfy applicable federal and state standards in the event of a release into the environment from a petroleum storage tank. Corrective action includes initial corrective action response or actions consistent with a remedial action to clean up contaminated soil and ground water or address residual effects after initial corrective action is taken, as well as actions necessary to monitor, assess and evaluate a release. Corrective action also includes the cost of removing a tank which is releasing or has been releasing petroleum products and the release cannot be corrected without removing the tank; but corrective action does not include the cost of replacing this tank with another tank.

(10) "Department" means the department of insurance of the state of Idaho.

(11) "Director" means the director of the department of insurance.

(12) "Farm tank" means any tank with a capacity of more than one hundred ten (110) gallons but less than one thousand one hundred (1,100) gallons situated above ground or underground which is used for storing motor fuel for noncommercial purposes and which is located on a tract of land devoted to the production of crops or raising animals, including fish, and associated residences and improvements. A farm tank must be located on the farm property. "Farm" includes fish hatcheries, rangeland and nurseries with growing operations.

(13) "Free product" means petroleum or petroleum products in the nonaqueous phase, (e.g., liquid not dissolved in water).

(14) "Fund" or "trust fund" means the Idaho petroleum clean water trust fund.

(15) "Heating tank" means any tank with a capacity of more than one hundred ten (110) gallons situated above ground or underground which is used for storing heating oil for consumptive use on the premises where stored.

(16) "Legal defense costs" means any expense that an owner or operator or the trust fund incurs in defending against claims or actions brought by the federal environmental protection agency or a state agency to require corrective action or to recover the costs of corrective action; or by or on behalf of a third party for bodily injury or property damage caused by a release.

(17) "Licensed distributor" means any distributor who has obtained a license under the provisions of section 63-2427A, Idaho Code. If a person subject to the fee imposed by section 41-4909(7), Idaho Code, is not required to obtain a distributor's license under paragraph (a) or (b) of subsection (1) of section 63-2427A, Idaho Code, such person shall apply to the commission for a limited license for the purpose of complying with the requirements of this chapter. Such a limited license shall not be valid for any other purpose. No bond shall be required for a limited license. A holder of a limited license is a "licensed distributor" for the purposes of filing reports, paying fees and other actions necessary to the proper administration and enforcement of this chapter.

(18) "Noncommercial purposes" means not for resale, with respect to motor fuels.

(19) "Occurrence" means an accident, including continuous or repeated exposure to conditions, which resulted in a release into the environment of petroleum products from a petroleum storage tank.

(20) "Operator" means any person in control, or having responsibility for, the daily operations of a petroleum storage tank.

(21) "Owner" means the owner of a petroleum storage tank, except that "owner" does not include any person who, without participation in the management of a petroleum storage tank, holds indicia of ownership primarily to protect the owner's security interest in the tank.

(22) "Person" means any corporation, association, partnership, one (1) or more individuals, or any governmental unit, or agency thereof, other than federal or state agencies.

(23) "Petroleum" and/or "petroleum products" mean crude oil, or any fraction thereof, which is liquid at standard conditions of temperature and pressure (i.e., at sixty (60) degrees fahrenheit and fourteen and seven-tenths (14.7) pounds per square inch absolute). The term includes motor gasoline, gasohol, other alcohol blended fuels, diesel fuel, heating oil and aviation fuel. Biodiesel and biodiesel blends, as those terms are defined in section 63-2401, Idaho Code, ethanol, and natural gasoline are also petroleum or petroleum products.

(24) "Property damage" means injury or destruction to tangible property caused by an occurrence.

(25) "Release" means any spilling, leaking, emitting, discharging, escaping, leaching, or disposing from a petroleum storage tank into ground water, surface water, or surface or subsurface soils.

(26) "Residential tank" means any tank with a capacity of more than one hundred ten (110) gallons but less than one thousand one hundred (1,100) gallons situated above ground or underground which is used for storing motor fuel for noncommercial purposes and which is located on property used primarily for dwelling purposes.

(27) "Site" means a single parcel of property where petroleum or petroleum products are stored in a petroleum storage tank and includes all contiguous land, structures, other appurtenances, surface water, ground water, surface and subsurface soil, and subsurface strata within and beneath the property boundary.

(28) "State" means the state of Idaho or any office, department, agency, authority, commission, board, institution, hospital, college, university or other instrumentality thereof.

(29) "Tank" means a stationary device designed to contain an accumulation of petroleum or petroleum products and constructed of nonearthen materials (e.g., concrete, steel, plastic) that provide structural support.

(30) "Trustees" means the trustees of the Idaho petroleum clean water trust fund, who are appointed by the governor pursuant to this chapter.

(31) "Underground storage tank" means any one (1) or combination of tanks, including underground pipes connected thereto, that is used to contain an accumulation of petroleum or petroleum products, and the volume of which, including the volume of underground pipes connected thereto, is ten percent (10%) or more beneath the surface of the ground. This term does not include any:

(a) Farm or residential tank of one thousand one hundred (1,100) gallons or less capacity used for storing motor fuel for noncommercial purposes;

(b) Tank used solely for storing heating oil for consumptive use on the premises where stored;

(c) Septic tank;

(d) Pipeline facility including gathering lines regulated under:

(i) The natural gas pipeline safety act of 1968 (49 U.S.C. app. 1671, et seq.); or

(ii) The hazardous liquid pipeline safety act of 1979 (49 U.S.C. app. 2001, et seq.); or

(iii) State laws comparable to the provisions of the law referred to in paragraph (d)(i) or (d)(ii) of this subsection as an intrastate pipeline facility;

(e) Surface impoundment, pit, pond or lagoon;

(f) Storm water or wastewater collection system;

(g) Flow-through process tank;

(h) Liquid trap or associated gathering lines directly related to oil or gas production and gathering operations;

(i) Storage tank situated in an underground area (such as a basement, cellar, mineworking, drift, shaft, or tunnel) if the storage tank is situated upon or above the surface of the floor;

(j) Tanks with a capacity of one hundred ten (110) gallons or less.

The term "underground storage tank" does not include any pipes connected to any tank which is described in paragraphs (a) through (i) of this definition.

(32) "Underground storage tank regulations" means regulations for petroleum storage tanks promulgated by the United States environmental protection agency (EPA) pursuant to subtitle I of the solid waste disposal act, as amended by the resource conservation and recovery act, regulations promulgated by the state of Idaho as part of a state program for underground storage tank regulation under subtitle I, or other regulations affecting underground storage tank operations and management, including the international fire code adopted by the state of Idaho.

History:

[41-4903, added 1990, ch. 119, sec. 1, p. 268; am. 1991, ch. 59, sec. 2, p. 116; am. 1995, ch. 132, sec. 12, p. 576; am. 1998, ch. 428, sec. 6, p. 1350; am. 2002, ch. 86, sec. 9, p. 199; am. 2003, ch. 96, sec. 2, p. 283; am. 2007, ch. 37, sec. 3, p. 92; am. 2009, ch. 21, sec. 1, p. 48; am. 2011, ch. 6, sec. 1, p. 14.]
Idaho Code § 41-2104 — Idaho Code / Title 41 / Chapter 21 / Section 41-2104
41-2104 REQUIRED PROVISIONS — CAPTIONS — OMISSIONS — SUBSTITUTIONS.
Status: in_force

41-2104. Required provisions — Captions — Omissions — Substitutions. (1) Except as provided in subsection (2) below, each such policy delivered or issued for delivery to any person in this state shall contain the provisions specified in sections 41-2105 to 41-2116, inclusive, and sections 41-2139 and 41-2140, Idaho Code, of this chapter, in the words in which the same appear; except, that the insurer may, at its option, substitute for one or more of such provisions corresponding provisions of different wording approved by the director which are in each instance not less favorable in any respect to the insured or the beneficiary. Each such provision shall be preceded individually by the applicable caption shown, or, at the option of the insurer, by such appropriate individual or group captions or sub-captions as the director may approve.

(2) If any such provision is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the director, shall omit from such policy any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of a provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy.

History:

[41-2104, added 1961, ch. 330, sec. 493, p. 645; am. 1972, ch. 348, sec. 1, p. 1030; am. 1974, ch. 66, sec. 1, p. 1146.]
Idaho Code § 41-256 — Idaho Code / Title 41 / Chapter 2 / Section 41-256
41-256 ASSISTANTS TO STATE FIRE MARSHAL — LOCAL APPEAL PROCEDURE.
Status: in_force

41-256. Assistants to state fire marshal — Local appeal procedure. (1) The chief of the fire department, or his deputy, of every city or county, or fire protection district organized under state law in which a fire department is established, and in areas where no organized fire department exists the county sheriff, or his deputy, shall be assistants to the state fire marshal in carrying out the provisions of the International Fire Code and rules of the state fire marshal.

(2) Any final decision made by an assistant to the state fire marshal involving an interpretation of the International Fire Code or rules of the state fire marshal shall contain a notification to any party subject to the decision that the decision may be appealed in a local appeal procedure that is substantially similar to the one set forth in the International Fire Code or rules adopted by the state fire marshal.

History:

[(41-256) 39-3506 added 1970, ch. 190, sec. 6, p. 547; am. 1974, ch. 39, sec. 47, p. 1023; am. and redesig. 1982, ch. 120, sec. 4, p. 340; am. 1988, ch. 317, sec. 1, p. 976; am. 2002, ch. 86, sec. 7, p. 199; am. 2008, ch. 402, sec. 3, p. 1107.]
Idaho Code § 41-255 — Idaho Code / Title 41 / Chapter 2 / Section 41-255
41-255 DUTIES OF STATE FIRE MARSHAL.
Status: in_force

41-255. Duties of state fire marshal. In addition to the duties prescribed in section 41-254, Idaho Code, the state fire marshal shall:

(1) Administer and enforce this act.

(2) Appoint, employ and discharge such deputies and other employees as in his judgment may be necessary, control their powers, prescribe their duties, and fix their compensation.

(3) Keep books, records and accounts, which shall be open to inspection and audit by the state of Idaho at all times.

(4) Purchase necessary equipment and supplies, and incur any other reasonable and necessary expense in connection with or required for the purpose of carrying out the provisions of this act.

(5) Maintain in his office a record of all fires occurring in the state, and of all the facts concerning the same, including statistics as to the extent of such fires and the damage caused thereby and whether such losses were covered by insurance, and if so, in what amount. All such records shall be public, except any testimony taken in an investigation under the provisions of this act which the state fire marshal in his discretion may withhold from the public.

(6) Establish by rule uniform training provisions for all persons acting as assistants to the state fire marshal as provided in section 41-256, Idaho Code.

History:

[(41-255) 39-3505 added 1970, ch. 190, sec. 5, p. 547; am. 1974, ch. 39, sec. 46, p. 1023; am. and redesig. 1982, ch. 120, sec. 3, p. 339; am. 2008, ch. 402, sec. 2, p. 1106.]
Idaho Code § 41-114A — Idaho Code / Title 41 / Chapter 1 / Section 41-114A
41-114A SERVICE CONTRACTS.
Status: in_force

41-114A. Service contracts. (1) The term "service contract," as used in this section, means a contract or agreement for a separately stated consideration for a specific duration to perform the repair, replacement or maintenance of property or to reimburse, in whole or in part, the owner of such property for the repair, replacement or maintenance of property if an operational or structural failure is due to a defect in materials or manufacturing or to normal wear and tear. A service contract may contain a provision for incidental payment under such contract where service, repair or replacement is not feasible or economical. Service contracts, other than motor vehicle service contracts subject to the provisions of the Idaho motor vehicle service contract act, chapter 62, title 41, Idaho Code, may provide for the repair, replacement or maintenance of property for damage resulting from power surges and accidental damage from handling.

(2) The marketing, sale, offering for sale, issuance, making, proposing to make, and administration of a service contract is exempt from the provisions of title 41, Idaho Code.

(3) Service contracts shall be subject to the provisions of the Idaho consumer protection act, chapter 6, title 48, Idaho Code.

History:

[41-114A, added 2000, ch. 249, sec. 1, p. 702; am 2008, ch. 137, sec. 1, p. 396; am. 2018, ch. 116, sec. 3, p. 247.]
Idaho Code § 41-4609 — Idaho Code / Title 41 / Chapter 46 / Section 41-4609
41-4609 ADMINISTRATIVE PROCEDURES.
Status: in_force

41-4609. Administrative procedures. Rules adopted for the implementation and administration of this chapter shall be in accordance with the provisions of chapter 52, title 67, Idaho Code.

History:

[41-4609, added 1999, ch. 98, sec. 2, p. 311.]
Idaho Code § 41-2845 — Idaho Code / Title 41 / Chapter 28 / Section 41-2845
41-2845 ILLEGAL DIVIDENDS — PENALTY.
Status: in_force

41-2845. Illegal dividends — Penalty. (1) Any director of a domestic stock insurer or domestic mutual insurer who knowingly votes for or concurs in declaration or payment of a dividend to stockholders or policyholders other than as authorized under sections 41-2843 or 41-2844 shall upon conviction thereof be subject to the penalties provided by section 41-117 (general penalty), and shall be jointly and severally liable, together with other such directors likewise voting for or concurring, for any loss thereby sustained by creditors of the insurer to the extent of such dividend.

(2) Any stockholder receiving such an illegal dividend shall be liable in the amount thereof to the insurer.

(3) The director may revoke or suspend the certificate of authority of any insurer which has declared or paid such an illegal dividend.

History:

[41-2845, added 1961, ch. 330, sec. 613, p. 645.]
Idaho Code § 41-1606 — Idaho Code / Title 41 / Chapter 16 / Section 41-1606
41-1606 RATE FILINGS REQUIRED.
Status: in_force

41-1606. Rate filings required. (1) There shall be filed with the director on behalf of every insurer writing workmen's compensation coverages in this state, every manual of classifications, rules and rates, every rating plan and every modification of any of the foregoing which it proposes to use. Every such filing shall state the proposed effective date thereof, and shall indicate the character and extent of the coverage contemplated. When a filing is not accompanied by the information upon which the filing is supported, and the director does not have sufficient information to determine whether such filing meets the requirements of this chapter, he shall require the insurer's rating organization or the insurer to furnish the information upon which it supports the filing and in such event the waiting period shall commence as of the date such information is furnished. The information furnished in support of a filing may include (a) the experience or judgment of the insurer, (b) the insurer's or rating organization's interpretation of any statistical data relied upon, (c) the experience of other insurers or rating organizations, or (d) any other relevant factors.

(2) A filing and any supporting information shall be open to public inspection after the filing becomes effective.

History:

[41-1606, added 1961, ch. 330, sec. 367, p. 645.]
Idaho Code § 41-4118 — Idaho Code / Title 41 / Chapter 41 / Section 41-4118
41-4118 TERMINATION OF REGISTRATION.
Status: in_force

41-4118. Termination of registration. (1) The director may terminate the registration of a joint public agency self-funded plan upon written request of the board, or if he finds, after an examination, that the trust fund is insolvent.

(2) The director may terminate the registration of a plan for violation of this chapter, or failure of the board to file the annual statement with the director within the time required under section 41-4111, Idaho Code, or if he finds, after an examination of the trust fund or the plan:

(a) That the plan no longer meets the qualifications required by sections 41-4101 and 41-4110, Idaho Code, and that the deficiency will not or cannot be remedied within a reasonable time;

(b) That as a matter of frequent practice the benefits promised by the plan are not being fairly and promptly paid;

(c) That the cost of administering the plan is excessive in relation to the character and volume of service being rendered in the administration; or

(d) That the trust fund has been subject to fraudulent or dishonest practices on the part of the board, administrator, consultant, any participating employer, or beneficiaries.

(3) The director shall so terminate the registration by his written order given to the board and to each employer last of record a participant in the plan. The order shall state the grounds upon which it is made and its effective date. The order shall be subject to judicial review in the same manner as applies to official orders of the director in general.

History:

[41-4118, added 2006, ch. 415, sec. 1, p. 1278.]
Idaho Code § 41-3101 — Idaho Code / Title 41 / Chapter 31 / Section 41-3101
41-3101 SCOPE OF CHAPTER — PROVISIONS EXCLUSIVE.
Status: in_force

41-3101. Scope of chapter — Provisions exclusive. (1) This chapter applies only to domestic county mutual fire insurers as heretofore organized or doing business under the provisions of title 41, chapter 23, Idaho Code (prior to 1961 revision), or as hereafter organized under this chapter.

(2) This chapter shall also apply as to domestic fire insurance associations or organizations heretofore formed and affiliated with and insuring only property owned by a bona fide fraternal society operating on the lodge system, or owned by members of such society. Except as otherwise expressly provided for, such associations or organizations, hereinafter referred to as "fraternal insurers," are also included within the terms "insurer" or "county mutual fire insurer" as used in this chapter.

(3) No provision of this code shall apply to such insurers unless contained or referred to in this chapter.

History:

[41-3101, added 1961, ch. 330, sec. 659, p. 645.]
Idaho Code § 41-1609 — Idaho Code / Title 41 / Chapter 16 / Section 41-1609
41-1609 DISAPPROVAL OF FILING WITHIN THE WAITING PERIOD.
Status: in_force

41-1609. Disapproval of filing within the waiting period. If within the waiting period or any extension thereof as provided in section 41-1608(2), the director finds that a filing does not meet the requirements of this chapter, he shall send to the rating organization which made the filing written notice of disapproval of the filing specifying therein in what respects he finds the filing fails to meet the requirements of this chapter and stating that the filing shall not become effective.

History:

[41-1609, added 1961, ch. 330, sec. 370, p. 645.]
Idaho Code § 41-6306 — Idaho Code / Title 41 / Chapter 63 / Section 41-6306
41-6306 EXEMPTION.
Status: in_force

41-6306. exemption. (1) An insurer shall be exempt from the requirements of this chapter if:

(a) The insurer has an annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the federal crop insurance corporation and federal flood program, less than five hundred million dollars ($500,000,000); and

(b) The insurance group of which the insurer is a member has an annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the federal crop insurance corporation and federal flood program, less than one billion dollars ($1,000,000,000).

(2) If an insurer qualifies for exemption pursuant to subsection (1)(a) of this section, but the insurance group of which the insurer is a member does not qualify for exemption pursuant to subsection (1)(b) of this section, then the ORSA summary report that may be required pursuant to section 41-6305, Idaho Code, shall include every insurer within the insurance group. This requirement may be satisfied by the submission of more than one (1) ORSA summary report for any combination of insurers, provided any combination of reports includes every insurer within the insurance group.

(3) If an insurer does not qualify for exemption pursuant to subsection (1)(a) of this section, but the insurance group of which the insurer is a member qualifies for exemption pursuant to subsection (1)(b) of this section, then the only ORSA summary report that may be required pursuant to section 41-6305, Idaho Code, shall be the report applicable to that insurer.

(4) An insurer that does not qualify for exemption pursuant to subsection (1) of this section may apply to the director for a waiver from the requirements of this chapter based upon unique circumstances. In deciding whether to grant the insurer's request for a waiver, the director may consider the type and volume of business written, ownership and organizational structure, and any other factor the director considers relevant to the insurer or insurance group of which the insurer is a member. If the insurer is part of an insurance group with insurers domiciled in more than one (1) state, the director shall coordinate with the lead state director or commissioner and with the other domiciliary commissioners in considering whether to grant the insurer's request for a waiver.

(5) Notwithstanding the exemptions stated in this section:

(a) The director may require that an insurer maintain a risk management framework, conduct an ORSA and file an ORSA summary report based on unique circumstances including, but not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests and international supervisor requests.

(b) The director may require that an insurer maintain a risk management framework, conduct an ORSA and file an ORSA summary report if the insurer has risk-based capital for company action level event as set forth in section 41-5403, Idaho Code, meets one (1) or more of the standards of an insurer deemed to be in hazardous financial condition as defined in IDAPA 18.01.66, "director's authority for companies deemed to be in hazardous financial condition," or otherwise exhibits qualities of a troubled insurer as determined by the director.

(6) If an insurer that qualifies for an exemption pursuant to subsection (1) of this section subsequently no longer qualifies for that exemption due to changes in premium, as reflected in the insurer's most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer shall have one (1) year following the year the threshold is exceeded to comply with the requirements of this chapter.

History:

[41-6306, added 2017, ch. 75, sec. 1, p. 190.]
Idaho Code § 41-1405 — Idaho Code / Title 41 / Chapter 14 / Section 41-1405
41-1405 RATE STANDARDS.
Status: in_force

41-1405. Rate standards. (1) Rates shall not be excessive, inadequate or unfairly discriminatory.

(2) No rate shall be held to be excessive unless the director finds that:

(a) Such rate is unreasonably high for the insurance provided, and

(b) A reasonable degree of competition does not exist in Idaho with respect to the classification to which the rate is applicable.

(3) No rate shall be held to be inadequate unless the director finds that:

(a) Such rate is unreasonably low for the insurance provided and the continued use of such rate endangers the solvency of the insurer using the same, or

(b) Such rate is unreasonably low for the insurance provided and the use of such rate by the insurer using the same has, or if continued will have, the effect of destroying competition or creating a monopoly.

(4) Neither of such findings shall be made by the director except after a hearing on reasonable notice.

(5) Nothing contained in this chapter shall be construed to repeal or modify the provisions of chapter 13, title 41 (trade practices and frauds), Idaho Code, and any rate, rating classification, rating plan or schedule, or variation thereof, established in violation of any of such provisions shall, in addition to the consequences stated in such chapter or elsewhere, be deemed a violation of this section.

History:

[41-1405, added 1961, ch. 330, sec. 310, p. 645; am. 1969, ch. 306, sec. 3, p. 917; am. 1977, ch. 142, sec. 6, p. 308.]
Idaho Code § 41-4102 — Idaho Code / Title 41 / Chapter 41 / Section 41-4102
41-4102 DEFINITIONS.
Status: in_force

41-4102. Definitions. As used in this chapter:

(1) "Administrator" means a person, other than a board member, employed by the board to administer a joint public agency self-funded plan.

(2) "Beneficiary" means any individual entitled, under the joint public agency self-funded plan, to payment by the trust fund of any part of all of the cost of any health care service rendered to him.

(3) "Board of trustees" or "board" is the board of trustees of the trust fund.

(4) "Contribution" means the amount paid or payable by the employer or employee into the trust fund.

(5) "Director" means the director of the department of insurance of this state.

(6) "Joint powers agreement" means an agreement entered into between public agencies pursuant to chapter 23, title 67, Idaho Code.

(7) "Joint public agency self-funded plan" or "self-funded plan" or "plan" means any public agency plan established by a joint powers agreement and under which payment for any disability benefits not otherwise provided for under title 72, Idaho Code (worker's compensation and related laws — industrial commission), medical, surgical, hospital, and other services for prevention, diagnosis, or treatment of any disease, injury, or bodily condition of an employee is, or is to be, regularly provided for or promised from funds created or maintained in whole or in part by contributions or payments thereto by a public agency employer, or by a public agency employer and the employees of the public agency, and not otherwise covered by insurance or contract with a health care service corporation, health maintenance organization, or similar other third party prepayment plan.

(8) "Person" means any individual, corporation, association, firm, syndicate, organization or other entity.

(9) "Public agency" means any city, county or political subdivision of this state, including, but not limited to: counties; school districts; highway districts; port authorities; instrumentalities of counties, county hospitals, cities or any political subdivision created under the laws of the state of Idaho; and the state of Idaho and any agency of the state government. "Public agency" also means any group of more than one (1) of the above public agencies acting together pursuant to a joint powers agreement in accordance with chapter 23, title 67, Idaho Code.

(10) "Surplus" means the excess of the assets of a self-funded plan minus the liabilities of the plan, provided the liabilities of a self-funded plan shall include the claims liability of the plan.

(11) "Trust fund" means a fund established under a joint public agency self-funded plan for receipt of contributions of employers and employees and payment of or with respect to health care service costs of beneficiaries.

History:

[41-4102, added 2006, ch. 415, sec. 1, p. 1272; am. 2018, ch. 61, sec. 1, p. 151.]
Idaho Code § 41-1624 — Idaho Code / Title 41 / Chapter 16 / Section 41-1624
41-1624 COOPERATION AMONG RATING ORGANIZATIONS AND INSURERS.
Status: in_force

41-1624. Cooperation among rating organizations and insurers. Cooperation among rating organizations or among rating organizations and insurers in rate making or in other matters within the scope of this chapter is hereby authorized, providing the filings resulting from such cooperation are subject to all the provisions of this chapter which are applicable to filings generally. The director may review such cooperative activities and practices and if, after a hearing, he finds that any such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of law, he may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of law, and requiring the discontinuance of such activity or practice.

History:

[I.C., sec. 41-1624, as added by 1969, ch. 306, sec. 24, p. 917.]
Idaho Code § 41-2603 — Idaho Code / Title 41 / Chapter 26 / Section 41-2603
41-2603 JUSTIFICATION OF SURETY — DIRECTOR'S CERTIFICATE AS EVIDENCE.
Status: in_force

41-2603. Justification of surety — Director's certificate as evidence. (1) The director is authorized to issue to any person applying therefor, a certificate showing that any surety insurer that has complied with the laws of the state of Idaho is qualified to do a surety business in this state, and stating the general terms of the risks authorized to be so written.

(2) Any such certificate or any certified copy of any uncanceled certificate, shall be received in evidence as a sufficient justification of such surety and its authority to do business in this state: provided, however, that the certificate of the county recorder to any such certified copy, or any certificate furnished directly by the director to an applicant therefor, must bear a date the same as, or later than the date of the bond, undertaking or obligation upon which justification is being made.

History:

[41-2603, added 1961, ch. 330, sec. 556, p. 645.]
Idaho Code § 41-1855 — Idaho Code / Title 41 / Chapter 18 / Section 41-1855
41-1855 HEALTH CARE — CASH PRICE FOR SERVICES.
Status: in_force

41-1854 [41-1855]. health care — cash price for services. [Effective January 1, 2027] (1) As used in this section, the terms "covered person," "health benefit plan," "health care provider," "health care services," "health carrier," and "medically necessary" shall have the same meanings as provided in section 41-5903, Idaho Code.

(2) A health carrier may not prohibit a health care provider from offering a covered person the option of paying the provider's discounted cash price for health care services. For the purposes of this subsection, "discounted cash price" means the charge that applies to a covered person who pays cash for a health care service. With respect to a hospital, the discounted cash price shall have the same meaning as provided in 45 CFR 180.20 if the hospital has a discounted cash price. It does not mean the amount charged to individuals who are eligible for free care or are eligible for the amounts charged pursuant to a hospital's financial assistance policy.

(3) A covered person may choose to pay out of pocket for a health care service from a health care provider.

(4) If a covered person obtains a medically necessary health care service covered by such person's health benefit plan and negotiates for a price lower than the allowed amount established by the benefit plan, as provided to the covered person upon request, and the covered person pays out of pocket for the health care service, the amount of the out-of-pocket cost shall be counted toward the covered person's out-of-pocket deductible and annual maximum out-of-pocket expense if the requirements of this section are met.

(5) A health carrier that receives the documentation described in subsection (6) of this section shall count the full amount that the covered person paid out of pocket toward the deductible and annual maximum out-of-pocket expense if:

(a) The health care service is covered under the health benefit plan of the covered person; and

(b) The covered person negotiated for a lower cost for the health care service than the allowed amount established by the covered person's health benefit plan for that covered health care service.

(6) A covered person shall electronically send documentation to the health carrier that provides the following information:

(a) The health care services the covered person or patient received and the name of the health care provider and contact information;

(b) The final bill or statement for the health care services; and

(c) The negotiated cost of the health care service that the covered person received and documentation that:

(i) The covered person paid out of pocket for the health care services received; and

(ii) The health care provider is not making a claim against the health carrier for payment of the health care service provided to the covered person or patient.

(7) The health care provider shall accept the discounted cash payment from the covered person as payment in full and shall not bill the covered person or the health carrier for any balance between the amount collected from the covered person and the billed charge for the service by the provider.

(8) The amount of the out-of-pocket cost shall be attributed to the in-network deductible and annual maximum out-of-pocket expense if the provider was an in-network provider and to the out-of-network deductible and annual maximum out-of-pocket expense if the provider was an out-of-network provider.

(9) The amount counted toward an applicable out-of-pocket deductible and annual maximum out-of-pocket expense shall not exceed the total amount that the covered person is required to pay out of pocket during a contractually agreed on period of time for health care services that are included under the health benefit plan of the covered person and shall not carry over once a new contract or agreement period for the plan begins.

(10) The provisions of subsections (4) through (9) of this section shall not apply to:

(a) A plan that provides coverage:

(i) Only for a specified disease or diseases;

(ii) Only for accidental death or dismemberment;

(iii) Only for dental or vision care;

(iv) Under an individual limited benefit policy;

(v) For a hospital confinement indemnity policy;

(vi) For disability income insurance or a combination of accident-only and disability income insurance; or

(vii) As a supplement to liability insurance;

(b) Any programs administered by the Idaho department of health and welfare through the state medicaid program under title XIX of the federal social security act, as amended;

(c) A medicare supplemental policy as defined by section 1882(g)(1) of the social security act;

(d) Worker's compensation insurance coverage;

(e) Medical payment insurance issued as part of a motor vehicle insurance policy;

(f) A long-term care policy, including a nursing home fixed indemnity policy, unless a determination is made that the policy provides benefit coverage so comprehensive that the policy meets the definition of a health benefit plan; or

(g) Short-term health insurance issued on a nonrenewable basis with a duration of six (6) months or less.

(11) Nothing in this section shall be construed to waive or override prior authorization, medical necessity, or utilization management requirements under the health benefit plan.

History:

[(41-1855) 41-1854, added 2026, ch. 275, sec. 1, p. 1161.]
Idaho Code § 41-3350 — Idaho Code / Title 41 / Chapter 33 / Section 41-3350
41-3350 CONSERVATION OF PROPERTY OF FOREIGN OR ALIEN INSURERS FOUND IN THIS STATE.
Status: in_force

41-3350. Conservation of property of foreign or alien insurers found in this state. (1) If a domiciliary liquidator has not been appointed, the director may apply to the district court by verified petition for an order directing him to act as conservator to conserve the property of an alien insurer not domiciled in this state or a foreign insurer on any one or more of the following grounds:

(a) Any of the grounds in section 41-3312, Idaho Code;

(b) That any of its property has been sequestered by official action in its domiciliary state, or in any other state;

(c) That enough of its property has been sequestered in a foreign country to give reasonable cause to fear that the insurer is or may become insolvent;

(d) (i) That its certificate of authority to do business in this state has been revoked or that none was ever issued; and

(ii) That there are residents of this state with outstanding claims or outstanding policies.

(2) When an order is sought under subsection (1) of this section, the court shall cause the insurer to be given such notice and time to respond thereto as is reasonable under the circumstances.

(3) The court may issue the order in whatever terms it shall deem appropriate. The filing or recording of the order with the clerk of the district court or the recorder of deeds of the county in which the principal business of the company is located or the county in which its principal office or place of business is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that recorder of deeds would have imparted.

(4) The conservator may at any time petition for and the court may grant an order under section 41-3351, Idaho Code, to liquidate assets of a foreign or alien insurer under conservation, or, if appropriate, for an order under section 41-3353, Idaho Code, to be appointed ancillary receiver.

(5) The conservator may at any time petition the court for an order terminating conservation of an insurer. If the court finds that the conservation is no longer necessary, it shall order that the insurer be restored to possession of its property and the control of its business. The court may also make such finding and issue such order at any time upon motion of any interested party, but if such motion is denied all costs shall be assessed against such party.

History:

[41-3350, added 1981, ch. 249, sec. 2, p. 535.]
Idaho Code § 41-4939 — Idaho Code / Title 41 / Chapter 49 / Section 41-4939
41-4939 VOUCHERS FOR EXPENDITURES.
Status: in_force

41-4939. Vouchers for expenditures. (1) The administrator of the trust fund shall not make any disbursement of twenty-five dollars ($25.00) or more, unless evidenced by a voucher or other document correctly describing the consideration for the payment and supported by a check or receipt endorsed or signed by or on behalf of the person receiving the money.

(2) If the disbursement is for services and reimbursement, the voucher or other document, or some other writing referred to therein, shall describe the services and itemize the expenditures.

(3) If the disbursement is in connection with any matter pending before any legislature or public body or before any public official, the voucher or other document shall also correctly describe the nature of the matter and of the trust fund's interest therein.

History:

[(41-4939) 41-4942, added 1990, ch. 119, sec. 1, p. 288; am. & redesig. 2003, ch. 96, sec. 43, p. 307.]
Idaho Code § 41-4117 — Idaho Code / Title 41 / Chapter 41 / Section 41-4117
41-4117 RECOVERY OF DEPLETED FUNDS.
Status: in_force

41-4117. Recovery of depleted funds. If after notice and hearing the director finds that any joint public agency self-funded plan trust fund has been depleted by reason of any wrongful or grossly negligent act or omission of a board member or any other person, he shall transmit a copy of his findings to the attorney general of this state, who may bring an action in the name of the people of this state, or intervene in any action brought by or on behalf of an employer or beneficiary, for the recovery of the amount of such depletion, for the benefit of the trust fund.

History:

[41-4117, added 2006, ch. 415, sec. 1, p. 1278.]
Idaho Code § 41-1705 — Idaho Code / Title 41 / Chapter 17 / Section 41-1705
41-1705 DISCLOSURE.
Status: in_force

41-1705. Disclosure. The broker, prior to the effective date of the policy, shall deliver written notice to the prospective insured disclosing the relationship between the broker and the controlled insurer; except that, if the business is placed through a subbroker who is not a controlling broker, the controlling broker shall retain in his records a signed commitment from the subbroker that the subbroker is aware of the relationship between the insurer and the broker and that the subbroker has or will notify the insured.

History:

[41-1705, added 1993, ch. 194, sec. 12, p. 506.]
Idaho Code § 41-2101 — Idaho Code / Title 41 / Chapter 21 / Section 41-2101
41-2101 SCOPE OF CHAPTER.
Status: in_force

41-2101. Scope of chapter. Nothing in this chapter shall apply to or affect:

(1) Any policy of liability or workmen's compensation insurance with or without supplementary expense coverage therein.

(2) Any group or blanket policy.

(3) Life insurance, endowment or annuity contracts, or contracts supplemental thereto which contain only such provisions relating to disability insurance as:

(a) Provide additional benefits in case of death or dismemberment or loss of sight by accident or accidental means, or as

(b) Operate to safeguard such contracts against lapse, or to give a special surrender value or special benefit or an annuity in the event that the insured or annuitant becomes totally and permanently disabled, as defined by the contract or supplemental contract.

(4) Reinsurance.

History:

[41-2101, added 1961, ch. 330, sec. 490, p. 645.]
Idaho Code § 41-1921 — Idaho Code / Title 41 / Chapter 19 / Section 41-1921
41-1921 MISSTATEMENT OF AGE OR SEX — ANNUITIES.
Status: in_force

41-1921. Misstatement of age or sex — Annuities. In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that if the age or sex of the person or persons upon whose life or lives the contract is made, or of any of them, has been misstated, the amount payable or benefits accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age or sex and that if the insurer shall make or has made any overpayment or overpayments on account of any such misstatement, the amount thereof with interest at the rate to be specified in the contract but not exceeding six per cent (6%) per annum, may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.

History:

[41-1921, added 1961, ch. 330, sec. 452, p. 645.]
Idaho Code § 41-1820 — Idaho Code / Title 41 / Chapter 18 / Section 41-1820
41-1820 UNDERWRITERS' AND COMBINATION POLICIES.
Status: in_force

41-1820. Underwriters' and combination policies. (1) Two (2) or more authorized insurers may jointly issue, and shall be jointly and severally liable on, an underwriters' policy bearing their names. Any one (1) insurer may issue policies in the name of an underwriter's department and such policy shall plainly show the true name of the insurer.

(2) Two (2) or more insurers may, with the approval of the director, issue a combination policy which shall contain provisions substantially as follows:

(a) That the insurers executing the policy shall be severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregating the full amount of insurance under the policy, and

(b) That service of process, or of any notice or proof of loss required by such policy, upon any of the insurers executing the policy, shall constitute service upon all such insurers.

(3) This section shall not apply to cosurety obligations.

History:

[41-1820, added 1961, ch. 330, sec. 412, p. 645.]
Idaho Code § 41-2135 — Idaho Code / Title 41 / Chapter 21 / Section 41-2135
41-2135 PROHIBITED POLICY PLANS — PROVISIONS.
Status: in_force

41-2135. Prohibited policy plans — Provisions. No insurer shall hereafter deliver or issue for delivery in this state any disability insurance policy:

(1) Providing benefits or values for surviving or continuing policyholders contingent upon the lapse or termination of the policies of other policyholders whether by death or otherwise.

(2) Containing any clause, provision or agreement providing a premium, deposit or other payment for, or promising the distribution of, any bonus, special fund, or guaranteed payment other than the insurance benefits specified in the policy. This restriction shall not be construed to apply to the payment of dividends to the holders of participating policies.

History:

[41-2135, added 1961, ch. 330, sec. 524, p. 645.]
Idaho Code § 41-3321 — Idaho Code / Title 41 / Chapter 33 / Section 41-3321
41-3321 POWERS OF LIQUIDATOR.
Status: in_force

41-3321. Powers of liquidator. (1) The liquidator shall have the power:

(a) To appoint a special deputy to act for him under this act, and to determine his reasonable compensation. The special deputy shall have all powers of the liquidator granted by this section. The special deputy shall serve at the pleasure of the liquidator;

(b) To employ employees and agents, legal counsel, actuaries, accountants, appraisers, consultants, and such other personnel as he may deem necessary to assist in the liquidation;

(c) To fix the reasonable compensation of employees and agents, legal counsel, actuaries, accountants, appraisers and consultants with the approval of the court;

(d) To pay reasonable compensation to persons appointed and to defray from the funds or assets of the insurer all expenses of taking possession of, conserving, conducting, liquidating, disposing of, or otherwise dealing with the business and property of the insurer. In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the director may advance the costs so incurred out of any appropriation for the maintenance of the insurance department. Any amounts so advanced for expenses of administration shall be repaid to the director for the use of the insurance department out of the first available monies of the insurer;

(e) To hold hearings, to subpoena witnesses to compel their attendance, to administer oaths, to examine any person under oath, and to compel any person to subscribe to his testimony after it has been correctly reduced to writing, and in connection therewith to require the production of any books, papers, records or other documents which he deems relevant to the inquiry;

(f) To collect all debts and monies due and claims belonging to the insurer, wherever located, and for this purpose:

1. To institute timely action in other jurisdictions, in order to forestall garnishment and attachment proceedings against such debts;

2. To do such other acts as are necessary or expedient to collect, conserve or protect its assets or property, including the power to sell, compound, compromise or assign debts for purposes of collection upon such terms and conditions as he deems best; and

3. To pursue any creditor's remedies available to enforce his claims.

(g) To conduct public and private sales of the property of the insurer;

(h) To use assets of the estate of an insurer under a liquidation order to transfer policy obligations to a solvent assuming insurer, if the transfer can be arranged without prejudice to applicable priorities under the provisions of section 41-3342, Idaho Code;

(i) To acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with, any property of the insurer at its market value or upon such terms and conditions as are fair and reasonable. He shall also have power to execute, acknowledge, and deliver any and all deeds, assignments, releases and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with the liquidation;

(j) To borrow money on the security of the insurer's assets or without security and to execute and deliver all documents necessary to that transaction for the purpose of facilitating the liquidation;

(k) To enter into such contracts as are necessary to carry out the order to liquidate, and to affirm or disavow any contracts to which the insurer is a party;

(l) To continue to prosecute and to institute in the name of the insurer or in his own name any and all suits and other legal proceedings, in this state or elsewhere, and to abandon the prosecution of claims he deems unprofitable to pursue further. If the insurer is dissolved under the provisions of section 41-3320, Idaho Code, he shall have the power to apply to any court in this state or elsewhere for leave to substitute himself for the insurer as plaintiff;

(m) To prosecute any action which may exist in behalf of the creditors, members, policyholders or shareholders of the insurer against any officer of the insurer, or any other person;

(n) To remove any or all records and property of the insurer to the offices of the director or to such other place as may be convenient for the purposes of efficient and orderly execution of the liquidation. Guaranty associations and foreign guaranty associations shall have such reasonable access to the records of the insurer as is necessary for them to carry out their statutory obligations;

(o) To deposit in one or more banks in this state such sums as are required for meeting current administration expenses and dividend distributions;

(p) To invest all sums not currently needed, unless the court orders otherwise;

(q) To file any necessary documents for record in the office of any recorder of deeds or records office in this state or elsewhere where property of the insurer is located;

(r) To assert all defenses available to the insurer as against third persons, including statutes of limitation, statutes of frauds, and the defense of usury. A waiver of any defense by the insurer after a petition in liquidation has been filed shall not bind the liquidator. Whenever a guaranty association or foreign guaranty association has an obligation to defend any suit, the liquidator shall give precedence to such obligation and may defend only in the absence of a defense by such guaranty associations;

(s) To exercise and enforce all the rights, remedies, and powers of any creditor, shareholder, policyholder, or member, including any power to avoid any transfer or lien that may be given by the general law and that is not included within sections 41-3326 through 41-3328, Idaho Code;

(t) To intervene in any proceeding wherever instituted that might lead to the appointment of a receiver or trustee, and to act as the receiver or trustee whenever the appointment is offered;

(u) To enter into agreements with any receiver or director of any other state relating to the rehabilitation, liquidation, conservation or dissolution of an insurer doing business in both states; and

(v) To exercise all powers now held or hereafter conferred upon receivers by the laws of this state not inconsistent with the provisions of this act.

(2) The enumeration, in this section, of the powers and authority of the liquidator shall not be construed as a limitation upon him, nor shall it exclude in any manner his right to do such other acts not herein specifically enumerated, or otherwise provided for, as may be necessary or appropriate for the accomplishment of or in aid of the purpose of liquidation.

History:

[41-3321, added 1981, ch. 249, sec. 2, p. 517.]
Idaho Code § 41-3222 — Idaho Code / Title 41 / Chapter 32 / Section 41-3222
41-3222 FUNDS.
Status: in_force

41-3222. Funds. (1) All assets shall be held, invested and disbursed for the use and benefit of the society and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment on the surrender of any part thereof, except as provided in the benefit contract.

(2) A society may create, maintain, invest, disburse and apply any special fund or funds necessary to carry out any purpose permitted by the laws of such society.

(3) A society may, pursuant to resolution of its supreme governing body, establish and operate one (1) or more separate accounts and issue contracts on a variable basis, subject to the provisions of law regulating life insurers establishing such accounts and issuing such contracts. To the extent the society deems it necessary in order to comply with any applicable federal or state laws, or any rules issued thereunder, the society may adopt special procedures for the conduct of the business and affairs of a separate account, may, for persons having beneficial interests therein, provide special voting and other rights, including, without limitation, special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee to manage the business and affairs of the account, and may issue contracts on a variable basis to which subsections (2) and (4) of section 41-3219, Idaho Code, shall not apply.

History:

[41-3222, added 1995, ch. 213, sec. 2, p. 734.]
Idaho Code § 41-4113 — Idaho Code / Title 41 / Chapter 41 / Section 41-4113
41-4113 EXAMINATION OF BOOKS, RECORDS AND ACCOUNTS.
Status: in_force

41-4113. Examination of books, records and accounts. (1) The books, records, accounts and affairs of a joint public agency self-funded plan shall be subject to examination by the director, by competent examiners duly authorized by him in writing, at such times or intervals as the director deems advisable. The purposes of the examination shall be to determine compliance of the plan with applicable laws, financial condition and actuarial adequacy of its trust fund, treatment accorded beneficiaries, and as to other factors materially related to the plan's management and operation.

(2) The board shall promptly make the books, records and accounts of the plan and trust fund available in Idaho to the examiner and otherwise facilitate the examination.

(3) The examiner shall conduct the examination expeditiously, make his report of the examination in writing, and deliver a copy thereof to the board and to the director. The board shall have four (4) weeks after receipt of the report within which to recommend to the director such corrections or changes therein as the board may deem appropriate. After making such corrections or changes, if any, as he deems proper, the director shall file the report in his office as a document open to public inspection, and deliver to the board a copy of the report as so corrected or changed.

(4) Since a joint public agency self-funded plan is funded by local tax moneys, the costs of the examination shall not be borne by the plan or trust fund of the plan.

History:

[41-4113, added 2006, ch. 415, sec. 1, p. 1277.]
Idaho Code § 41-1847 — Idaho Code / Title 41 / Chapter 18 / Section 41-1847
41-1847 ASSIGNMENT OF HEALTH INSURANCE CONTRACTS.
Status: in_force

41-1847. Assignment of health insurance contracts. (1) No insurer, as defined in section 41-5601, Idaho Code, shall assign the benefits of any contract with a practitioner or facility, as defined in section 41-5601, Idaho Code, that contains an agreement by the practitioner or facility to provide services to a patient covered by the insurer at a fee which is discounted from that practitioner's or facility's usual and customary fee, unless the contract between the insurer and the practitioner or facility, in conspicuous and plain language, specifically permits the contract to be assigned.

(2) An insurer shall send prompt written or electronic notice to the practitioner or facility, in conformance with the notice provisions of the contract between the insurer and the practitioner or facility, of each assignment it makes that is permitted by subsection (1) of this section. The notice shall identify the name and principal business address of each assignee.

(3) An assignment in violation of this section shall be void. The director shall enforce the provisions of this section and shall review and, if appropriate, investigate complaints received by the department related to noncompliance with the provisions of this section. If the director determines an insurer has violated the provisions of this section, the director may impose an administrative fine not to exceed five thousand dollars ($5,000) based upon an enforcement action. The director shall not suspend or revoke an insurer's certificate of authority for violation of this section. This section shall not create a private cause of action by or on behalf of a beneficiary or practitioner or facility against an insurer.

History:

[41-1847, added 2008, ch. 139, sec. 1, p. 400.]
Idaho Code § 41-1608 — Idaho Code / Title 41 / Chapter 16 / Section 41-1608
41-1608 EFFECTIVE DATE OF FILING.
Status: in_force

41-1608. Effective date of filing. (1) The director shall review filings as soon as reasonably possible after they have been made in order to determine whether they meet the requirements of this chapter.

(2) Subject to the exception specified in subsection (3) below, each filing shall be on file for a waiting period of sixty (60) days before it becomes effective. Upon the written application by the insurer or rating organization, the director may authorize a filing which he has reviewed to become effective before expiration of the waiting period. A filing shall be deemed to meet the requirements of this chapter unless disapproved by the director within the waiting period or any extension thereof.

(3) Any special filing with respect to a surety or guaranty bond required by law or by court or executive order or by order, rule or regulation of a public body, not covered by a previous filing, shall become effective when filed and shall be deemed to meet the requirements of this chapter until such time as the director reviews the filing and so long thereafter as the filing remains in effect.

History:

[41-1608, added 1961, ch. 330, sec. 369, p. 645; am. 1979, ch. 186, sec. 1, p. 544.]
Idaho Code § 41-2504 — Idaho Code / Title 41 / Chapter 25 / Section 41-2504
41-2504 APPLICATION OF UNINSURED MOTORIST COVERAGE.
Status: in_force

41-2504. Application of uninsured motorist coverage. An insurer's insolvency protection shall be applicable only to accidents occurring during a policy period in which its insured's uninsured motorist coverage is in effect where the liability insurer of the tortfeasor becomes insolvent within one (1) year after such an accident. Nothing herein contained shall be construed to prevent any insurer from affording insolvency protection under terms and conditions more favorable to its insureds than is provided hereunder.

History:

[I.C., sec. 41-2504, as added by 1967, ch. 61, sec. 3, p. 124.]
Idaho Code § 41-2220 — Idaho Code / Title 41 / Chapter 22 / Section 41-2220
41-2220 COVERAGE PROVIDED TO PERSONS HAVING INSURANCE.
Status: in_force

41-2220. Coverage provided to persons having insurance. An insurer providing group disability insurance coverage in this state shall make available to citizens of this state current major medical disability benefit policies under the terms set forth in this section. An insurer providing only accident-only, credit, dental, vision, long-term care or disability income insurance, coverage issued as a supplement to liability insurance, worker's compensation, or automobile medical payment insurance is not required to comply with the provisions of this section. An insurer providing only specified disease or hospital confinement indemnity insurance in this state shall not be required to comply with the provisions of this section, provided the insurance is marketed as supplemental health insurance and not as a substitute for hospital or major medical expense insurance, and the insurer certifies annually to the director that the insurance is being marketed in a manner consistent with the provisions of this subsection.

(2) As used in this section, the term "major medical disability policies" means policies, including medicare supplement insurance policies, contracts or certificates which are issued to provide hospital and medical-surgical coverage.

(3) Each insurer offering or maintaining group major medical disability policies in this state shall make a current group or individual policy available to an individual or dependent of an individual currently under group coverage by the insurer following expiration or the insured's declination of COBRA benefit coverage, if applicable, or otherwise upon termination of group coverage, without imposition by the insurer of underwriting criteria whereby coverage of an individual or a dependent of an individual is denied or subject to cancellation or nonrenewal, in whole or in part because of the individual's age, health or medical history or employment status, or, if employed, industry or job classification if the individual is insured with that insurer and wishes to convert coverage to another policy, plan or contract. When offering benefits pursuant to this section, the insurer shall be required to offer equal or lesser benefits than the insured has under the existing policy with the company. If the insurer offers benefits in excess of what was included in the insurer's contract to the insured, the insurer may impose health underwriting criteria and a preexisting condition clause which will waive all or a portion of benefits offered for the first twelve (12) months of the policy for a condition which has occurred during the preceding twelve (12) months. The preexisting condition clause herein authorized may not be applied to the transfer from one (1) medicare supplement policy, contract or certificate to another where benefits are increased. As used herein, "benefits in excess of what was included in the insured's contract" shall include but not be limited to lower deductibles, lower coinsurance or copayments, or lower maximum out-of-pocket expenditure for health care. The addition of pharmacy cards to replace existing prescription drug benefits, supplemental accident insurance, chiropractic services or vision services shall not constitute "benefits in excess of what was included in the insured's contract."

In implementing the provisions of this section, the director shall provide that insurers shall provide insureds with a simplified application that shall not exceed one (1) page in length and which shall not exceed six (6) medical questions.

History:

[(41-2220) 1994, ch. 404, sec. 2, p. 1153; am. and redesig. 1995, ch. 254, sec. 2, p. 833.]
Idaho Code § 41-1837 — Idaho Code / Title 41 / Chapter 18 / Section 41-1837
41-1837 RETURN OF UNEARNED PREMIUMS ON DESTRUCTION OF PROPERTY.
Status: in_force

41-1837. Return of unearned premiums on destruction of property. In the event of the total destruction of any insured property, on which the total amount of loss or agreed loss shall be less than the total amount insured thereon, the insurer or insurers shall return to the insured the unearned insurance premium for the excess of the insurance over the appraised or agreed loss, to be paid at the same time and in the same manner as the loss shall be paid.

History:

[41-1837, added 1961, ch. 330, sec. 429, p. 645.]
Idaho Code § 41-2503 — Idaho Code / Title 41 / Chapter 25 / Section 41-2503
41-2503 DEFINITIONS AND APPLICATION.
Status: in_force

41-2503. Definitions and application. (1) For the purposes of uninsured motorist coverage, the term "uninsured motor vehicle" shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency.

(2) For purposes of underinsured motorist coverage, subject to the further definitions, terms and conditions of such coverage, the term "underinsured motor vehicle" means a motor vehicle that is a self-insured motor vehicle, or a motor vehicle that is covered by a policy of motor vehicle liability insurance or an indemnity bond, with limits for bodily injury or death at least equal to those limits set forth in section 49-117, Idaho Code.

(3) Except as provided in subsections (1) and (2) of this section, the terms and conditions of any policy of motor vehicle liability insurance providing uninsured motorist coverage or underinsured motorist coverage are not altered or amended.

History:

[41-2503, as added by 1967, ch. 61, sec. 2, p. 124; am. 2008, ch. 69, sec. 2, p. 184.]
Idaho Code § 41-1957 — Idaho Code / Title 41 / Chapter 19 / Section 41-1957
41-1957 DISCLOSURE TO OWNER BY PROVIDER UPON SETTLEMENT CONTRACT.
Status: in_force

41-1957. Disclosure to Owner By Provider Upon Settlement Contract. A life settlement provider shall provide the owner with at least the following disclosures prior to the time the owner signs the life settlement contract. The disclosures shall be conspicuously displayed in the life settlement contract or in a separate document signed by the owner and shall provide the following information:

(1) The affiliation, if any, between the life settlement provider and the issuer of the insurance policy to be settled;

(2) The name, business address and telephone number of the life settlement provider;

(3) If an insurance policy to be settled has been issued as a joint policy or involves family riders or any coverage of a life other than the insured under the policy to be settled, the possible loss of coverage on the other lives under the policy and shall be advised to consult with his or her insurance producer or the insurer issuing the policy for advice on the proposed life settlement;

(4) The dollar amount of the current death benefit payable under the policy or certificate. If known, the life settlement provider shall also disclose the availability of any additional guaranteed insurance benefits, the dollar amount of any accidental death and dismemberment benefits under the policy or certificate and the extent to which the owner's interest in those benefits will be transferred as a result of the life settlement contract; and

(5) The name, business address and telephone number of the independent third party escrow agent, and the fact that the owner may inspect or receive copies of the relevant escrow or trust agreements or documents.

History:

[41-1957, added 2009, ch. 69, sec. 1, p. 199.]
Idaho Code § 41-4705 — Idaho Code / Title 41 / Chapter 47 / Section 41-4705
41-4705 ESTABLISHMENT OF CLASSES OF BUSINESS.
Status: in_force

41-4705. Establishment of classes of business. (1) A small employer carrier may establish a separate class of business only to reflect substantial differences in expected claims experience or administrative costs related to the following reasons:

(a) The small employer carrier uses more than one (1) type of system for the marketing and sale of health benefit plans to small employers;

(b) The small employer carrier has acquired a class of business from another small employer carrier; or

(c) The small employer carrier provides coverage to one (1) or more association groups that meet the requirements of section 41-2202, Idaho Code.

(2) A small employer carrier may establish up to nine (9) separate classes of business under the provisions of subsection (1) of this section.

(3) The director may establish regulations to provide for a period of transition in order for a small employer carrier to come into compliance with the provisions of subsection (2) of this section in the instance of acquisition of an additional class of business from another small employer carrier.

(4) The director may approve the establishment of additional classes of business upon application to the director and a finding by the director that such action would enhance the efficiency and fairness of the small employer marketplace.

History:

[41-4705, added 1993, ch. 176, sec. 1, p. 439.]
Idaho Code § 41-6505 — Idaho Code / Title 41 / Chapter 65 / Section 41-6505
41-6505 INSURER LIABILITY.
Status: in_force

41-6505. insurer liability. An insurer that provides coverage required by this chapter is not, based on that coverage, liable for any adverse effects of the approved clinical trial.

History:

[41-6505, added 2019, ch. 192, sec. 1, p. 605.]
Idaho Code § 41-5909 — Idaho Code / Title 41 / Chapter 59 / Section 41-5909
41-5909 EXPEDITED EXTERNAL REVIEW.
Status: in_force

41-5909. expedited external review. (1) A covered person may make a request for an expedited external review of a pre-service or concurrent service adverse benefit determination where the requested service meets the definition of an urgent care request and the covered person has exhausted the health carrier's internal grievance process or is entitled to request external review before exhausting the health carrier's internal grievance process as provided in section 41-5907, Idaho Code.

(2) Upon receipt of a request for an expedited external review, the director shall send a copy of the request to the health carrier.

(3) Upon receipt of the request pursuant to subsection (2) of this section, the health carrier shall determine, as soon as possible but not later than the second full business day thereafter, whether the carrier agrees that the request meets the reviewability requirements set forth in section 41-5908(3), Idaho Code. The health carrier shall notify the director and the covered person of its eligibility determination as soon as reasonably practicable but not later than one (1) business day after making the determination.

(a) The director may prescribe by rule the form for the health carrier's notice of initial determination under this subsection and any supporting information to be included in the notice.

(b) The notice of initial determination shall include a statement informing the covered person that a health carrier's initial determination that an external review request is ineligible for review, may be appealed to the director.

(4) The director may determine that a request is eligible for external review pursuant to section 41-5908(3), Idaho Code, notwithstanding a health carrier's initial determination that the request is ineligible, and require that it be referred for external review. In making a determination under this subsection (4), the director's decision shall be made in accordance with the applicable procedural requirements of this chapter and the terms and conditions of the covered person's health benefit plan.

(5) Upon receipt of the notice that the request meets the reviewability requirements, the director shall assign an independent review organization to conduct the expedited external review from the list of approved independent review organizations compiled and maintained by the director pursuant to section 41-5911, Idaho Code. The director shall notify the health carrier and the covered person of the name of the assigned independent review organization.

(6) In reaching a decision in accordance with subsection (9) of this section, the assigned independent review organization is not bound by the exercise of discretion or any decisions or conclusions reached during the health carrier's internal grievance process.

(7) Upon receipt of the notice from the director of the name of the independent review organization assigned to conduct the expedited external review pursuant to subsection (5) of this section, the health carrier or its designee utilization review organization shall provide or transmit all necessary documents and information considered in making the adverse benefit determination and the final adverse benefit determination to the assigned independent review organization electronically or by telephone or facsimile or any other available expeditious method.

(8) In addition to the documents and information provided or transmitted pursuant to subsection (7) of this section, the assigned independent review organization, to the extent the information or documents are available and the independent review organization considers them appropriate, shall consider the following in reaching a decision:

(a) The covered person's pertinent medical records;

(b) The attending health care professional's recommendation;

(c) Consulting reports from appropriate health care professionals and other documents submitted by the health carrier, covered person or the covered person's treating provider;

(d) The terms and conditions of coverage under the covered person's health benefit plan with the health carrier to ensure that the independent review organization's decision is controlled by the terms and conditions of coverage under the covered person's health benefit plan with the health carrier to the extent the health plan's terms and conditions are not in conflict with this chapter;

(e) The most appropriate practice guidelines, which shall include evidence-based standards, and may include any other practice guidelines developed by the federal government, national or professional medical societies, boards and associations, the health carrier's internal guidelines and medical policies;

(f) Any applicable clinical review criteria developed and used by the health carrier or its designated utilization review organization in making the adverse benefit determination;

(g) Medical or scientific evidence, as defined in section 41-5903(32), Idaho Code;

(h) The opinion of the independent review organization's clinical reviewer or reviewers after considering paragraphs (a) through (g) of this subsection (8) to the extent the information and documents are available.

(9) As expeditiously as the covered person's medical condition or circumstances require, but in no event more than seventy-two (72) hours after the date of receipt of the request for an expedited external review that meets the reviewability requirements set forth in section 41-5908(3), Idaho Code, the assigned independent review organization shall:

(a) Make a decision to uphold or reverse the final adverse benefit determination; and

(b) Notify the covered person, the health carrier and the director of the decision.

(10) If the notice provided pursuant to subsection (9)(b) of this section was not in writing, within forty-eight (48) hours after the date of providing that notice, the assigned independent review organization shall:

(a) Provide written confirmation of the decision to the covered person, the health carrier and the director, which shall include an explanation of the scientific or clinical judgment for the determination; and

(b) Include the information set forth in section 41-5908(20), Idaho Code.

(11) Upon receipt of the notice of a decision pursuant to subsection (10) of this section reversing the final adverse benefit determination, the health carrier shall notify the director and the covered person of its intent to pay the covered benefit as soon as reasonably practicable but not later than one (1) business day after receiving the notice of decision.

(12) An expedited external review shall not be provided for post service final adverse benefit determinations.

(13) The assignment by the director of an approved independent review organization to conduct an external review in accordance with this section shall be done on a random basis among those approved independent review organizations qualified to conduct the particular external review based on the nature of the health care service that is the subject of the final adverse benefit determination and other circumstances, including conflict of interest concerns pursuant to section 41-5912, Idaho Code.

History:

[41-5909, added 2009, ch. 87, sec. 1, p. 250; am. 2011, ch. 122, sec. 7, p. 343.]
Idaho Code § 41-207 — Idaho Code / Title 41 / Chapter 2 / Section 41-207
41-207 DELEGATION OF POWERS.
Status: in_force

41-207. Delegation of powers. (1) The director may delegate to his deputy, assistant, counsel, actuary, examiner or employee, the exercise or discharge in the director's name of any power, duty, or function, whether ministerial, discretionary or of whatever character, vested in or imposed upon the director under this code.

(2) The official act of any such person so acting in the director's name and by his authority shall be deemed to be an official act of the director.

History:

[41-207, added 1961, ch. 330, sec. 24, p. 645.]
Idaho Code § 41-3336 — Idaho Code / Title 41 / Chapter 33 / Section 41-3336
41-3336 PROOF OF CLAIM.
Status: in_force

41-3336. Proof of claim. (1) Proof of claim shall consist of a statement signed by the claimant that includes all of the following that are applicable:

(a) The particulars of the claim including the consideration given for it;

(b) The identity and amount of the security on the claim;

(c) The payments made on the debt, if any;

(d) That the sum claimed is justly owing and that there is not setoff, counterclaim, or defense to the claim;

(e) Any right of priority of payment or other specific right asserted by the claimants;

(f) A copy of the written instrument which is the foundation of the claim; and

(g) The name and address of the claimant and the attorney who represents him, if any.

(2) No claim need be considered or allowed if it does not contain all the information in subsection (1) of this section, which may be applicable. The liquidator may require that a prescribed form be used, and may require that other information and documents be included.

(3) At any time the liquidator may request the claimant to present information or evidence supplementary to that required under subsection (1) of this section and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence.

(4) No judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation, and no judgment or order against an insured or the insurer entered at any time by default or by collusion need be considered as evidence of liability or of quantum of damages. No judgment or order against an insured or the insurer entered within four (4) months before the filing of the petition need be considered as evidence of liability or of the quantum of damages.

(5) All claims of a guaranty association or foreign guaranty association shall be in such form and contain such substantiation as may be agreed to by the association and the liquidator.

History:

[41-3336, added 1981, ch. 249, sec. 2, p. 530.]
Idaho Code § 41-4701 — Idaho Code / Title 41 / Chapter 47 / Section 41-4701
41-4701 SHORT TITLE.
Status: in_force

41-4701. Short title. This chapter shall be known and may be cited as the "Small Employer Health Insurance Availability Act."

History:

[41-4701, added 1993, ch. 176, sec. 1, p. 435.]
Idaho Code § 41-1011 — Idaho Code / Title 41 / Chapter 10 / Section 41-1011
41-1011 ISSUANCE — REFUSAL OF LICENSE.
Status: in_force

41-1011. Issuance — Refusal of license. If after completion of application for a license, the taking and passing of any examination required under this chapter and, if required by the director, receipt of a report from the federal bureau of investigation based on the fingerprints of the applicant, the director finds that the applicant has fully met the requirements for a license, the director shall issue the license to the applicant; otherwise, the director shall refuse to issue the license and shall promptly notify the applicant and any appointing insurer or insurers of such refusal and state the grounds for the refusal. Pending the receipt of the report from the federal bureau of investigation, the director may, in his discretion, issue a temporary license if all other qualifications have been met.

History:

[41-1011, added 2001, ch. 296, sec. 3, p. 1053.]
Idaho Code § 41-4917 — Idaho Code / Title 41 / Chapter 49 / Section 41-4917
41-4917 ACTIONS FOR COLLECTION IN CASE OF DEFAULT — PENALTY — CANCELLATION OF INSURANCE CONTRACT.
Status: in_force

41-4917. Actions for collection in case of default — Penalty — Cancellation of insurance contract. (1) If an insured owner or operator of a storage tank shall default in any reimbursement required to be made by the insured to the trust fund under section 41-4907, Idaho Code, the amount due from the insured may be collected by civil action against him in the name of the administrator, and the same, when collected by the administrator shall be paid into the trust fund, and such insured's compliance with the provisions of this chapter requiring payment to be made to the trust fund shall date from the time the money is collected by the administrator.

(2) The contract of insurance held by an insured owner or operator of a storage tank which fails to comply with section 41-4912, Idaho Code, or who is in default in his enrollment fees for more than thirty (30) days may be canceled at the discretion of the administrator.

History:

[(41-4917) 41-4916, added 1990, ch. 119, sec. 1, p. 278; am. 1991, ch. 59, sec. 12, p. 128; am. & redesig. 2003, ch. 96, sec. 19, p. 298.]
Idaho Code § 41-4814 — Idaho Code / Title 41 / Chapter 48 / Section 41-4814
41-4814 BINDING EFFECT OF ORDERS ISSUED IN U.S. DISTRICT COURTS.
Status: in_force

41-4814. Binding effect of orders issued in U.S. district courts. An order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance, or operating in any state, or in all states or in any territory or possession of the United States, upon a finding that such a group is in a hazardous financial condition shall be enforceable in the courts of the state.

History:

[41-4814, added 1987, ch. 140, sec. 1, p. 282.]
Idaho Code § 41-5509 — Idaho Code / Title 41 / Chapter 55 / Section 41-5509
41-5509 CEDING ELIGIBILITY.
Status: in_force

41-5509. ceding Eligibility. (1) The pool shall provide reinsurance to any eligible individual who qualifies for reinsurance pursuant to this chapter if evidence is provided that such person has a qualifying high risk medical condition as defined by section 41-5501(8), Idaho Code.

(2) Notwithstanding any other provision of this chapter, eligibility for continuation of coverage under COBRA shall not render a person ineligible for reinsurance coverage under this chapter.

(3) Reinsurance through the pool shall cease:

(a) On the first day of the month following the date a person is no longer a resident of this state;

(b) On the date coverage under the individual health benefit plan ends;

(c) Upon the death of the covered person;

(d) At the option of the board, thirty (30) days after the plan makes any inquiry concerning the person's eligibility or place of residence to which the person does not reply.

(4) Reinsurance for a person who ceases to meet the eligibility requirements of this chapter may be terminated on the first day of the month following the date when the individual becomes ineligible.

History:

[(41-5509) 41-5510, added 2000, ch. 472, sec. 17, p. 1640; am. 2004, ch. 285, sec. 4, p. 808; am. 2004, ch. 332, sec. 3, p. 992; am. 2005, ch. 71, sec. 1, p. 247; am. 2005, ch. 353, sec. 8, p. 1120; am. 2008, ch. 297, sec. 2, p. 832; am. and redesig. 2017, ch. 281, sec. 9, p. 740.]
Idaho Code § 41-266 — Idaho Code / Title 41 / Chapter 2 / Section 41-266
41-266 ADMISSION OF INTERNATIONAL FIRE CODE IN EVIDENCE.
Status: in_force

41-266. Admission of international fire code in evidence. A copy of the international fire code, 2000 edition, or later editions and supplements adopted by the state of Idaho, shall be received in any court in this state as conclusive evidence of the contents of said code.

History:

[(41-266) 1970, ch. 190, sec. 17, p. 547; am. and redesig. 1982, ch. 120, sec. 14, p. 343; am. 2002, ch. 86, sec. 8, p. 199.]
Idaho Code § 41-1044 — Idaho Code / Title 41 / Chapter 10 / Section 41-1044
41-1044 EARLY SURRENDER OF DEFENDANT TO CUSTODY — RETURN OF PREMIUM.
Status: in_force

41-1044. Early surrender of defendant to custody — Return of premium. (1) A bail agent shall immediately return in full all premium and collateral associated with a bail transaction if the bail agent without good cause or in violation of the bail contract surrenders the defendant to custody before the time specified in the undertaking of bail or the bail bond for the appearance of the defendant or, if no time is specified in the undertaking or bond, before the time the defendant is lawfully required to appear in court.

(2) A bail agent has good cause for the early surrender of a defendant if the defendant has changed addresses without notifying the bail agent, engaged in self-concealment, left the jurisdiction of the court without permission of the bail agent or the court, materially breached the terms of the bail contract, or has otherwise acted in a manner that materially increases the risk of loss assumed by the bail agent or surety. A failure to pay the premium when due shall constitute good cause for early surrender only if at the time of the bail transaction the bail agent obtains the payor's signature on a written statement clearly stating the amount of premium due, the date by which the premium must be paid and that the failure to pay the premium by the due date will result in the early surrender of the defendant and forfeiture of any premium paid.

(3) Before surrendering a defendant early for good cause, a bail agent shall prepare a signed and dated written statement fully describing the facts upon which the agent relied in determining that good cause exists for the early surrender of the defendant. The statement shall be maintained as a record of the bail transaction and shall be made available to the department upon request. A bail agent who surrenders a defendant early for good cause shall not be entitled to seek recovery of any unpaid premium.

History:

[41-1044, added 2003, ch. 104, sec. 8, p. 331.]
Idaho Code § 41-4604 — Idaho Code / Title 41 / Chapter 46 / Section 41-4604
41-4604 EXTRATERRITORIAL JURISDICTION — GROUP LONG-TERM CARE INSURANCE.
Status: in_force

41-4604. Extraterritorial jurisdiction — Group long-term care insurance. No group long-term care insurance coverage may be offered to a resident of this state under a group policy issued in another state to a group described in section 41-4603(4)(d), Idaho Code, unless this state or another state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in this state has made a determination that such requirements have been met.

History:

[41-4604, added 1999, ch. 98, sec. 2, p. 306.]
Idaho Code § 41-6603 — Idaho Code / Title 41 / Chapter 66 / Section 41-6603
41-6603 REQUIREMENTS AND PROHIBITIONS FOR PHARMACY AUDITS.
Status: in_force

41-6603. requirements and prohibitions for pharmacy audits. (1) Any person or entity conducting an audit of a pharmacy shall:

(a) If performing the audit pursuant to a contract, identify and specifically describe the contract provisions authorizing the audit, including provisions relating to audit appeals. No contract may require prescription claim documentation or recordkeeping requirements that exceed requirements set forth in applicable federal or state law, regulation, or rule;

(b) Give written notice to the pharmacy and the pharmacy's contracting agent at least fourteen (14) days prior to conducting the on-site audit. For purposes of this subsection, the term "audit" means an audit conducted on behalf of an auditing entity of any records of a pharmacy for drugs dispensed by a pharmacy to a covered individual. The pharmacy shall have the opportunity to reschedule any on-site audit no more than seven (7) days from the date designated on the original audit notification;

(c) Not interfere with the delivery of pharmacist services to a patient and use every reasonable effort to minimize inconvenience and disruption to pharmacy operations during the on-site audit process;

(d) Conduct any audit involving clinical or professional judgment by means of or in consultation with a licensed pharmacist;

(e) Prior to leaving the pharmacy after the on-site portion of the pharmacy audit, provide to the pharmacy a complete list of pharmacy records reviewed;

(f) Not subject a pharmacy to a charge-back or recoupment for a clerical or recordkeeping error, such as a typographical error, scrivener's error, or computer error, including but not limited to a miscalculated day supply, an incorrectly billed prescription written date, or an incorrect prescription origin code, unless the error resulted in overpayment to the pharmacy. Prior to payment of the claim, the pharmacy shall have the right to submit amended claims electronically to correct clerical or recordkeeping errors in lieu of recoupment. A person shall not be subject to criminal penalties for errors described in this paragraph without proof of the intent required for conviction of the applicable crime;

(g) Limit any fee, charge-back, recoupment, or other adjustment to the actual overpayment associated with the dispensed product or portion of the dispensed product or the actual underpayment or overpayment as set forth in this subsection;

(h) Permit a pharmacy to use any valid prescription, including computerized patterned medical records or the records of a hospital, physician, or other authorized health care practitioner for drugs or medicinal supplies written or transmitted by any means of communication for purposes of validating the pharmacy record with respect to orders or refills of a legend or other prescribed drug. Documentation of an oral prescription order that has been verified by the prescribing health care provider shall meet the provisions of this paragraph for the initial audit review;

(i) Permit a pharmacy to use authentic and verifiable statements or records, including but not limited to medication administration records of a nursing home, assisted living facility, hospital, or health care provider with prescriptive authority, to validate the pharmacy record and delivery;

(j) Not include the dispensing fee in the calculation of overpayment of the prescription dispensed in a finding of an audit recoupment unless a prescription was not actually dispensed or a physician denied authorization of a dispensing order;

(k) Audit each pharmacy under standards, regularity, and parameters as other similarly situated pharmacies in a pharmacy network contract in this state. If the person or entity conducting the audit owns or manages pharmacies, all audits of such pharmacies shall be conducted under standards, regularity, and parameters as other similarly situated pharmacies in a pharmacy network contract in this state;

(l) Not exceed fifteen (15) months from the date the claim was submitted to or adjudicated by the person or entity conducting the audit;

(m) Not schedule or initiate an audit during the first seven (7) calendar days of any month unless otherwise consented to by the pharmacy;

(n) Disclose to any plan sponsor whose claims were included in the audit any money recouped in the audit;

(o) Provide network pharmacies information on the adjudication process for unit of use prescription products where the smallest unit either exceeds or does not maximize the benefit day's supply; and

(p) Permit a pharmacy to use a paper or electronic signature log that documents the delivery of a prescription to the possession of the patient or the patient's agent.

(2) Except as otherwise provided by federal or state law, an auditing entity that audits wholesale invoices during an audit of a pharmacy may not audit the pharmacy claims of another health benefit plan or pharmacy benefit manager.

(3) Any person or entity conducting a wholesale invoice audit shall not identify or label a prescription claim as an audit discrepancy when:

(a) The national drug code for the dispensed drug is in a quantity that is a subunit or multiple of the drug purchased by the pharmacist or pharmacy as supported by a wholesale invoice;

(b) The pharmacist or pharmacy dispensed the correct quantity of the drug according to the prescription; and

(c) The drug dispensed by the pharmacist or pharmacy shares all but the last two (2) digits of the national drug code of the drug reflected on the supplier invoice.

(4) Any person or entity conducting a wholesale invoice audit shall accept as evidence, subject to validation, to support the validity of a pharmacy claim related to a dispensed drug:

(a) Supplier invoices issued before the date the drug was dispensed in the pharmacist's or pharmacy's possession; or

(b) Invoices and any supporting documents from any supplier as authorized by federal or state law to transfer ownership of the drug acquired by the pharmacist or pharmacy.

(5) Any person or entity conducting a wholesale invoice audit shall provide, no later than five (5) business days after the date of a request by the pharmacist or pharmacy, all supporting documents the pharmacist's or pharmacy's purchase suppliers provided to the person or entity on whose behalf the audit is being conducted.

(6) Any person or entity conducting an audit shall not audit more than two hundred fifty (250) prescriptions, based on date of service, per calendar year. The annual limit to the number of prescription claims audited shall be inclusive of all audits, including any prescription-related documentation requests from the person or entity conducting the audit or the person or entity on whose behalf the audit is being conducted during a calendar year.

(7) If paper copies of records are requested by the person or entity conducting an audit, the person or entity shall pay twenty-five cents (25¢) per page to cover the costs incurred by the pharmacy. The person or entity conducting the audit shall provide the pharmacy with accurate instructions, including any required form for obtaining reimbursement for the copied records.

(8) The person or entity conducting an audit shall:

(a) Deliver a preliminary audit findings report to the pharmacy and the pharmacy's contracting agent within sixty (60) calendar days of conducting the audit. The preliminary report shall include contact information for the auditing entity that conducted the pharmacy audit and an appropriate and accessible point of contact, including telephone number, facsimile number, electronic mail address, and auditing firm name and address so that audit results, procedures, and discrepancies may be reviewed. The preliminary audit report shall include but is not limited to claim level information for any discrepancy found and total dollar amounts of claims subject to recoupment;

(b) Allow the pharmacy at least sixty (60) calendar days following receipt of the preliminary audit findings report in which to produce documentation to address any discrepancy found during the audit. A pharmacy may request an extension, not to exceed an additional thirty (30) calendar days;

(c) Deliver a final audit findings report to the pharmacy and the pharmacy's contracting agent signed by the auditor within thirty (30) calendar days after receipt of documentation or evidence provided by the pharmacy, as provided for in section 41-6604, Idaho Code;

(d) Allow the pharmacy to reverse and resubmit claims electronically within thirty (30) days of receipt of the final audit report in lieu of the auditing entity recouping discrepant claim amounts from the pharmacy;

(e) Not recoup any disputed funds until after final disposition of the audit findings, including the appeals process as provided for in section 41-6604, Idaho Code; and

(f) Not accrue interest during the audit and appeal period.

(9) Each person or entity conducting an audit shall provide a copy of the final audit results, and a final audit report upon request, after completion of any review process to any plan sponsor whose claims were included in the audit.

(10) The full amount of any recoupment on an audit shall be refunded to the plan sponsor whose claims were included in the audit and to whom the recoupment is owing. Except as otherwise provided for in this subsection, a charge or assessment for an audit shall not be based, directly or indirectly, on amounts recouped. This subsection shall not prevent the person or entity conducting the audit from charging or assessing the responsible party, directly or indirectly, based on amounts recouped if both of the following conditions are met:

(a) The plan sponsor and the person or entity conducting the audit have a contract that explicitly states the percentage charge or assessment to the plan sponsor; and

(b) A commission to an agent or employee of the person or entity conducting the audit is not based, directly or indirectly, on amounts recouped.

(11) Unless the provisions of this subsection are superseded by state or federal law, auditors shall have access to previous audit reports on a particular pharmacy only when the previous audits were conducted by the auditing person or entity for the same person or entity on whose behalf the audit is being conducted. An auditing vendor contracting with multiple persons or entities shall not use audit reports or other information gained from an audit on a pharmacy to conduct another audit for another person or entity.

History:

[41-6603, added 2023, ch. 233, sec. 1, p. 719.]
Idaho Code § 41-2863 — Idaho Code / Title 41 / Chapter 28 / Section 41-2863
41-2863 PURCHASES AND SALES WHICH ARE EXEMPT.
Status: in_force

41-2863. Purchases and sales which are exempt. The provisions of section 41-2861 shall not apply to any purchase and sale, or sale and purchase, and the provisions of section 41-2862 shall not apply to any sale of an equity security of a domestic stock insurance company not then or theretofore held by him in an investment account, by a dealer in the ordinary course of his business and incident to the establishment or maintenance by him of a primary or secondary market (otherwise than on an exchange as defined in the Securities Exchange Act of 1934) for such security. The director of the department of insurance may, by such rules and regulations as he deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.

History:

[41-2863, added 1965, ch. 294, sec. 4, p. 782.]
Idaho Code § 41-1107 — Idaho Code / Title 41 / Chapter 11 / Section 41-1107
41-1107 EMERGENCY ADJUSTERS.
Status: in_force

41-1107. Emergency adjusters. No adjuster's license or qualifications shall be required as to any adjuster who is sent into this state by and on behalf of an authorized insurer or adjusting firm or corporation for the purpose of investigating or making adjustment of a particular loss under an insurance policy issued by an authorized insurer or as a lawful surplus line contract, or for the purpose of temporarily assisting or substituting for a licensed adjuster who is incapacitated due to illness, injury, or any unforeseeable or uncontrollable incident, or for the adjustment of a series of losses resulting from a catastrophe common to all such losses.

History:

[41-1107, added 1961, ch. 330, sec. 243, p. 645.]
Idaho Code § 41-1955 — Idaho Code / Title 41 / Chapter 19 / Section 41-1955
41-1955 EXAMINATION AND RECORDS.
Status: in_force

41-1955. Examination and Records. (1) A person required to be licensed by sections 41-1950 through 41-1965, Idaho Code, is subject to examination as authorized in chapter 2, title 41, Idaho Code, and shall for five (5) years retain copies of all:

(a) Proposed, offered and executed contracts, purchase agreements, underwriting documents, policy forms, executed disclosure statements and applications from the date of the proposal, offer or execution of the contract or purchase agreement, whichever is later;

(b) All checks, drafts or other evidence and documentation related to the payment, transfer, deposit or release of funds from the date of the transaction; and

(c) All other records and documents related to the requirements of sections 41-1950 through 41-1965, Idaho Code.

(2) The provisions of this section does not relieve a person of the obligation to produce these documents to the director after the retention period has expired if the person has retained the documents.

(3) Records required to be retained by this section must be legible and complete and in accordance with section 28-50-107, Idaho Code, and may be retained in paper, photograph, microprocess, magnetic, mechanical, or electronic media, or by any process that accurately reproduces or forms a durable medium for the reproduction of a record.

History:

[41-1955, added 2009, ch. 69, sec. 1, p. 197.]
Idaho Code § 41-4942 — Idaho Code / Title 41 / Chapter 49 / Section 41-4942
41-4942 RULES — DIRECTOR — DEPARTMENT OF INSURANCE.
Status: in_force

41-4942. Rules — Director — Department of insurance. (1) The director may make reasonable rules necessary as an aid to the effectuation of any provision of this chapter. No such rule shall extend, modify or conflict with any provision of this chapter and the reasonable implications thereof.

(2) Such rules, or any amendment thereof, shall be made by the director only after a public hearing thereon of which the director has given written notice not less than thirty (30) days in advance to the board of the trust fund then registered with him. If reasonably possible the director shall include with the notice a copy of the proposed rules or amendment, or a condensed summary of material proposed provisions.

(3) All procedures and policies concerning the promulgation of such rules, or any amendment thereof, are subject to the provisions of chapter 52, title 67, Idaho Code, and the rules of practice and procedure of the department of insurance.

History:

[(41-4942) 41-4945, added 1990, ch. 119, sec. 1, p. 289; am. & redesig. 2003, ch. 96, sec. 46, p. 309.]