Department of
Insurance

2008 Insurance Legislation and Rules Summary

(All legislation takes effect July 1, 2008, unless otherwise noted.)

Department of Insurance Legislation:

• House Bill 411- Annuity Suitability: Amends Idaho Code Section 41-1940 to require that producers selling annuity products do a suitability analysis for all purchasers of annuities. Prior to this change, the law required a suitability analysis only if the purchaser was age 65 or older.
  
  
• House Bill 412 – Managed Care Amendments: Updates and makes some technical corrections to Idaho 's managed care laws (Chapter 39 of Title 41). The changes allow the Director to set deposit requirements for limited managed care organizations, change some filing dates for audited financial reports to coincide with other insurers, and modify filing requirements for certain annual disclosures.

Department of Insurance Rule Changes (effective at end of Legislative session) :

• Rule 18.01.01 Title Insurance Definitions of Tract Indexes and Abstract Records : Amends rule to clarify that name indexes maintained by title insurance agents do not have to be maintained back to the date of inception of title as do tract indexes.
  
  
• Rule 18.01.03 Military Sales Practices Rule : Makes permanent a temporary rule setting forth standards governing sales of insurance products to U.S. military personnel. This is a model rule developed by the National Association of Insurance Commissioners in response to federal legislation targeting abusive sales practices. (See Bulletin 08-04 for additional information.)
  
  
• Rule 18.01.06 Coverage for Newborn and Newly Adopted Children : New rule clarifying coverage requirements for newborn and newly adopted children and defining what is required to be covered as a congenital anomaly.
  
  
• Rule 18.01.50 Adoption of International Fire Code : Adopts the 2006 edition of the International Fire Code.
  
  
• Rule 18.01.60 Long Term Care Insurance Minimum Standards : Amended to clarify required producer training standards for Long Term Care Partnership policies and delete some unnecessary wording.
  
  
• Rule 18.01.79 Preferred Mortality Tables : Rule adopting new mortality tables designed to allow life insurers to set reserves more accurately for favorable risks.

Other Insurance Related Legislation for 2008:

• House Bill 429 – Underinsured Motorist Coverage: Amends Idaho Code Sections 41-2502 and 41-2503 to require that motor vehicle insurance contracts include coverage for underinsured motorist coverage unless the insured rejects the coverage; also defining “underinsured motor vehicle” and requiring that insurers provide a written summary of uninsured and underinsured motorist coverage in a form approved by the DOI. Applies to policies issued or renewed on or after January 1, 2009.
   
• House Bill 493 – Service Contracts: Amends Idaho Code Section 41-114A to provide that service contracts not subject to regulation as insurance may provide for the repair, replacement or maintenance of property for damage resulting from power surges and for accidental damage and handling.
   
• House Bill 494 – Investments by Domestic Reciprocal Insurers: Adds a new section, 41-732, allowing a domestic reciprocal comprised exclusively of political subdivisions of the state that insures property and casualty risks to invest funds subject to the conditions, restrictions and limitations generally applicable to insurers set forth in Chapter 7 of Title 41.
   
• House Bill 522 – Assignment of Health Insurance Contracts: Adds a new section, 41-1847, prohibiting insurers from assigning a preferred provider organization contract between an insurer and provider without the agreement of both parties and requiring notice to the provider of any assignments.
   
• House Bill 547 – Terrorism Exclusion: Amends Idaho Code Section 41-2401 (Standard Fire Policy law) to delete from the definition of “terrorism” a requirement that an act be on behalf of a foreign person or interest. This change makes the statutory definition consistent with the latest version of the federal Terrorism Risk Insurance Act (TRIA), which permits coverage exclusions for domestic terrorism as well as foreign.
   
  
• House Bill 591 – Substance Abuse Exemption from Managed Care Act: Exempts programs administered by the Health & Welfare Substance Abuse Disorder Bureau and its contracted managed care organization from regulation under Chapter 39, Title 41, as a managed care organization.  
  
  
• Senate Bill 1344 – Cooperation with Dept. of Health & Welfare: Adds a new section, 41-318, requiring that insurers cooperate with the Dept. of Health & Welfare with respect to individuals covered by disability insurance who are provided public assistance, and setting forth a penalty for failure to cooperate.
   
  
• Senate Bill 1394 – Dependent Age: Amends Chapters 22, 32, 34, 40, and 41 of Title 41 to require that health plans offered to or sponsored by large groups, fraternal societies, public service corporations and self-funded groups to cover a dependent up to the age of 21 if the dependent is not a full time student and up to the age of 25 if a full time student. Small group and individual contracts were made subject to this requirement in 2007.
  
  
• Senate Bill 1395 – High Risk Pool Eligibility: Amends Idaho Code Section 41-5510 to make eligible for high risk pool coverage individuals who face a reasonable probability that they will exhaust their lifetime maximum benefit under existing coverage within 90 days.
   
  
• Senate Bill 1397 – Public Adjuster Licensing: Adds a new Chapter 58 to Title 41 setting forth licensing requirements for public adjusters.
   
• Senate Joint Memorial No. 114 – States findings of the Legislature and joins with the National Conference of Insurance Legislators in expressing Idaho 's strong opposition to the proposed federal National Insurance Act of 2007.  

Fire Safety Legislation:  

• House Bill 620 – Fire Code Enforcement: Amends Chapter 2 of Title 41 to require notice of appeal rights from final decisions by assistants to the State Fire Marshal involving interpretations of the fire code and creates a right of appeal to the State Fire Marshal.
  
  
• Senate Bill 1398 – Reduced Cigarette Ignition Propensity: Adds a new chapter 89 to Title 39, Idaho Code, requiring that only reduced ignition propensity cigarettes be sold in Idaho .      

Note: These brief summaries are not intended to fully explain, interpret or analyze the referenced legislation and rules. These summaries are intended solely as a reference to legislation and rule changes affecting the business of insurance that may be of interest to the public. Persons with an interest in any of the items noted above should review the complete bill or rule. These may be accessed on-line through the website of the Idaho Legislature (bills) and the website of the Idaho Department of Administration (rules).