§ 41-101. Short title.

This act constitutes the Idaho insurance code.

§ 41-102. “Insurance” defined.

“Insurance” is a contract whereby one undertakes to indemnify another or pay or allow a specified or ascertainable amount or benefit upon determinable risk contingencies.

§ 41-103. “Insurer” defined.

“Insurer” includes every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity.

§ 41-104. “Person” defined.

“Person” includes any individual, insurer, company, association, organization, Lloyd’s insurer, society, reciprocal insurer or interinsurance exchange, partnership, syndicate, business trust, corporation and every legal entity.

§ 41-105. “Director,” “department” defined.

1. “Director” means the director of the department of insurance of this state.
2. “Department” means the department of insurance of this state.

§ 41-106. “Domestic,” “foreign,” “alien” insurer defined.

1. A “domestic” insurer is one formed under the laws of this state or an insurer which has transferred its domicile pursuant to section 41-342, Idaho Code, to this state.
2. A “foreign” insurer is one formed under the laws of a jurisdiction other than this state.
3. An “alien” insurer is one formed under the laws of any country other than the United States of America, its states, districts, territories, and commonwealths.
4. Except where distinguished by context, “foreign” insurers includes also “alien” insurers.

§ 41-107. “State” defined.

When used in context signifying a jurisdiction other than the state of Idaho, “state” means any state, district, territory, commonwealth, or possession of the United States of America, and the Panama Canal Zone.

§ 41-108. “Domicile” defined.

The “domicile” of an insurer means:

1. As to Canadian insurers, Canada and the province in which the insurer’s head office is located.
2. As to other alien insurers authorized to transact insurance in one or more states, as provided in section 41-340[, Idaho Code] (retaliatory provision).
3. As to alien insurers not authorized to transact insurance in one or more states, the country under the laws of which the insurer was formed.
4. As to all other insurers, the state under the laws of which the insurer was formed or the state to which the insurer has transferred its domicile.

§ 41-109. “Principal office” defined.

“Principal office” means:

1. As to Canadian insurers, the office in Canada from which the general affairs of the insurer are directed or managed;
2. As to other alien insurers authorized to transact insurance in one or more states, the office in United States from which the general affairs of the insurer in the United States are directed or managed;
3. As to all other insurers, the office from which the general affairs of the insurer are directed or managed.

§ 41-110. “Authorized,” “unauthorized” insurer defined.

1. An “authorized” insurer is one duly authorized by a subsisting certificate of authority issued by the director to transact insurance in this state.
2. An “unauthorized” insurer is one not so authorized.

§ 41-111. “Certificate of authority,” “license” defined.

1. A “certificate of authority” is one issued by the director evidencing the authority of an insurer to transact insurance in this state.
2. A “license” is authority granted by the director pursuant to this code authorizing the licensee to engage in a business or operation of insurance in this state other than as an insurer, and the certificate by which such authority is evidenced.

§ 41-112. “Transacting insurance” defined.

“Transacting insurance” includes any of the following:

1. Solicitation and inducement.
2. Preliminary negotiations.
3. Effectuation of a contract of insurance.
4. Transaction of matters subsequent to effectuation of a contract of insurance and arising out of it.
5. Mailing or otherwise delivering any written solicitation to any person in this state by an insurer or any person acting on behalf of the insurer for fee or compensation.

§ 41-113. Compliance required — Public interest.

1. No person shall transact a business of insurance in Idaho, or relative to a subject of insurance resident, located or to be performed in Idaho, without complying with the applicable provisions of this code.
2. The business of insurance is one affected by the public interest, requiring that all persons be actuated by good faith, abstain from deception, and practice honesty and equity in all insurance matters. Upon the insurer, the insured, and their representatives, and all concerned in insurance transactions, rests the duty of preserving the integrity of insurance.

§ 41-114. Application of code as to particular types of insurers.

No provision of chapter 1, title 41, Idaho Code, shall apply with respect to:

1. County mutual insurers (as identified in chapter 31, title 41, Idaho Code), except as stated in chapter 31, title 41, Idaho Code (County Mutual Insurers).
2. Fraternal benefit societies (as identified in chapter 32, title 41, Idaho Code), except as stated in chapter 32, title 41, Idaho Code (Fraternal Benefit Societies).
3. Hospital and medical professional service corporations (as identified in chapter 34, title 41, Idaho Code), except as stated in chapter 34, title 41, Idaho Code (Hospital and Professional Service Corporations).
4. Religious corporations or societies which are exempt from taxation pursuant to section 501(c)(3) of the Internal Revenue Code, as amended, and that provide only first-party property or casualty coverages exclusively to their members.
5. Any organization described by section 501(c)(3) of the Internal Revenue Code, as amended, but only with respect to the organization’s issuance of charitable gift annuities in accordance with the terms of section 41-120, Idaho Code.

§ 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.

§ 41-114B. Legal service expense plans.

1. The term “legal service expense plan,” as used in this section, means a contract or agreement for a stated consideration between a plan administrator and a member or group of members, whereby the member pays the administrator, in advance or by installments, for the receipt of professional legal services, advice or representation. Such services in Idaho shall be provided by attorneys at law licensed in Idaho. The attorneys shall be prepaid under a contract or agreement with the administrator to provide specified legal services for the express benefit of the plan member and shall agree to render services to the member when required.
2. The marketing, sale, contracting, issuance of a contract, plan administration and delivery of services under a legal service expense plan are exempt from all other provisions of title 41, Idaho Code. In addition, such plans shall not be characterized as “insurance” when marketed in Idaho.
3. Legal service expense plans, but not law firm retainer agreements, shall be subject to the provisions of the Idaho consumer protection act, chapter 6, title 48, Idaho Code, and attorneys providing service shall be subject to the provisions relating to the regulation of the practice of law under title 3, Idaho Code.

§ 41-115. Particular provisions prevail.

Provisions of this code relative to a particular kind of insurance or a particular type of insurer or to a particular matter shall prevail over provisions relating to insurance in general or insurers in general or to such matter in general.

§ 41-116. Captions not to affect meaning.

The scope and meaning of any provision of this code shall not be limited or otherwise affected by the caption or heading of any chapter, section or provision.

§ 41-117. General penalty.

Each violation of this code for which a greater penalty is not provided by another provision of this code or by other applicable laws of this state, shall in addition to any applicable prescribed denial, suspension, or revocation of certificate of authority or license be punishable by an administrative penalty of not more than one thousand dollars ($1,000) for any individual or natural person and not more than five thousand dollars ($5,000) for any other person, imposed by the director, and upon conviction by a fine of not more than one thousand dollars ($1,000) or by imprisonment in the county jail for a period not to exceed six (6) months, or by both such fine and imprisonment in the discretion of the court. Each instance of violation may be considered a separate offense.

§ 41-117A. Penalty for transacting insurance without proper licensing.

The director may impose an administrative penalty not to exceed fifteen thousand dollars ($15,000), for deposit in the general account of the state of Idaho, upon any person who transacts insurance of any kind or character or transmits for a person, other than himself, an application for a policy of insurance without proper licensing, or after such licensing shall have been suspended or revoked.

§ 41-118. “Chapter” defined.

As used in this code and except as otherwise required by context, “chapter” means a particular numbered chapter of this code as indicated by context.

§ 41-119. Applicability of code under unrepealed laws.

Any laws of Idaho, other than this code, remaining in force after the effective date of this code which refer to certain provisions of law repealed under section 809 of this act, shall be deemed to refer to those provisions of this code which are in substance the same or substantially the same as such repealed provisions.

§ 41-120. Charitable gift annuities.

1. As used in this section:
   1. “Charitable gift annuity” means a transfer of cash or other property by a donor to a charitable organization in return for an annuity payable over one (1) or two (2) lives, under which the actuarial value of the annuity is less than the value of the cash or other property transferred and the difference in value constitutes a charitable deduction for federal tax purposes.
   2. “Charitable organization” means an entity described by sections 501(c)(3) or 170(c) of the internal revenue code of 1986 (26 U.S.C. 501(c)(3) or 170(c)).
   3. “Qualified charitable gift annuity” means a charitable gift annuity described in sections 501(m)(5) and 514(c)(5) of the internal revenue code of 1986 (26 U.S.C. 501(m)(5) and (514(c)(5)), that is issued by a charitable organization that, on the date of the annuity agreement:
      1. Has a minimum of one hundred thousand dollars ($100,000) (after being adjusted annually by the department for inflation, beginning on July 1, 1997, by reference to the city index of the consumer price index or some equivalent measure) in unrestricted cash, cash equivalents, or publicly traded securities, exclusive of the assets funding the annuity agreement; and
      2. Has been in continuous operation for at least three (3) years or is a successor or affiliate of a charitable organization that has been in continuous operation for at least three (3) years.
2. It is hereby declared that the issuance of a qualified charitable gift annuity does not constitute engaging in the business of insurance in this state. A charitable gift annuity issued before July 1, 1996, is a qualified charitable gift annuity for purposes of this section and the issuance of such a charitable gift annuity does not constitute engaging in the business of insurance in this state.
3. When entering into an agreement for a qualified charitable gift annuity, the charitable organization shall disclose in writing to the donor, in the annuity agreement, that a qualified charitable gift annuity is not insurance under the laws of this state and is not subject to regulation by the department of insurance or protected by a guaranty association affiliated with the department. The notice provisions of this subsection must be written in a separate paragraph in the annuity agreement in a print size no smaller than that employed in the annuity agreement generally.
4. A charitable organization that issues qualified charitable gift annuities shall notify the department in writing within ninety (90) days after the effective date of this section, or on the date on which it enters into the organization’s first qualified charitable gift annuity agreement, whichever is later. Notice to the department must:
   1. Be signed by the officer or director of the charitable organization;
   2. Identify the charitable organization;
   3. Certify that:
      1. The organization is a charitable organization;
      2. The annuities issued by the charitable organization are qualified charitable gift annuities as defined in this section.
5. The organization shall not be required by the department to submit additional information except to enable the department to determine appropriate penalties that may be applicable under subsection (5) of this section. (5) The failure of a charitable organization to comply with the notice requirements imposed by this section does not prevent a charitable gift annuity that otherwise meets the requirements of this section from constituting a qualified charitable gift annuity. However, the director of the department may enforce performance of the notice requirements of this section by sending a letter by certified mail, return receipt requested, demanding that the charitable organization comply with the requirements of subsections (3) and (4) of this section. The department may fine the charitable organization in an amount not to exceed one thousand dollars ($1,000) per qualified charitable gift annuity agreement issued until the charitable organization complies with subsections (3) and (4) of this section.
6. It is hereby declared that the issuance of a qualified charitable gift annuity does not constitute an unfair or deceptive act or practice in the conduct of trade or commerce prohibited by chapter 6, title 48, Idaho Code.

§ 41-121. Exemption of health care sharing ministries from the insurance code.

1. A health care sharing ministry shall not be considered to be engaging in the business of insurance for purposes of this title.
2. As used in this section, “health care sharing ministry” means a faith-based nonprofit organization that is tax exempt under the Internal Revenue Code which:
   1. Limits its participants to those who are of a similar faith;
   2. Acts as a facilitator among participants who have financial or medical needs and matches those participants with other participants with the present ability to assist those with financial or medical needs in accordance with criteria established by the health care sharing ministry;
   3. Provides for the financial or medical needs of a participant through contributions from one (1) participant to another;
   4. Provides amounts that participants may contribute with no assumption of risk or promise to pay among the participants and no assumption of risk or promise to pay by the health care sharing ministry to the participants;
   5. Provides a written monthly statement to all participants that lists the total dollar amount of qualified needs submitted to the health care sharing ministry, as well as the amount actually published or assigned to participants for their contribution; and
   6. Provides a written disclaimer on or accompanying all applications and guideline materials distributed by or on behalf of the organization that reads, in substance: “Notice: The organization facilitating the sharing of medical expenses is not an insurance company, and neither its guidelines nor plan of operation is an insurance policy. Whether anyone chooses to assist you with your medical bills will be totally voluntary because no other participant will be compelled by law to contribute toward your medical bills. As such, participation in the organization or a subscription to any of its documents should never be considered to be insurance. Regardless of whether you receive any payment for medical expenses or whether this organization continues to operate, you are always personally responsible for the payment of your own medical bills.”
3. It is hereby declared that participation in or operation of a health care sharing ministry does not constitute an unfair or deceptive act or practice in the conduct of trade or commerce prohibited by chapter 6, title 48, Idaho Code.

§ 41-201. Department of insurance.

There is hereby created the department of insurance of the state of Idaho. The department shall, for the purposes of section 20, article IV, of the Constitution of the state of Idaho, be an executive department of the state government. The department of insurance shall be composed of such divisions and units as authorized by the provisions of section 41-206, Idaho Code.

§ 41-202. Director — Appointment — Term — Qualifications.

1. The director of the department of insurance shall be the chief executive officer of the department of insurance.
2. The director shall be appointed by the governor and shall hold office for a term of four (4) years, subject to earlier removal by the governor. A vacancy in the office of director shall be filled for the balance of the unexpired term only.
3. The governor shall not appoint as director any individual, and no individual shall hold the office of director, who is not qualified therefor as follows:
   1. Must be a qualified elector of the state of Idaho; and
   2. Must have had at least five (5) years’ practical experience in one or more of the types of insurance business subject to regulation by the director, or have had other professional or business experience reasonably adequate in character and scope to equip him to discharge the duties and fulfill the responsibilities of the office of director.

§ 41-203. Terms construed.

Wherever the words “commissioner of insurance” or “insurance commissioner” appear in title 41, Idaho Code, or elsewhere in the Idaho Code, they shall be understood and construed to mean the director of the department of insurance.

§ 41-204. Director’s oath and bond.

At the time of taking office the director shall take an oath of office, and give bond in favor of the state of Idaho in the time, form and manner prescribed in chapter 8, title 59, Idaho Code. The oath shall be filed with the secretary of state.

§ 41-205. Official seal.

1. The director shall have an official seal, in the form and design as so in use immediately prior to the effective date of this code.
2. The director shall issue under his official seal all certificates, other than licenses of agents, brokers, adjusters, and other insurance representatives, to be issued by him under the laws of this state.

§ 41-206. Divisions and employees.

1. The department shall be organized into such divisions and such other units as may be administratively established in order to efficiently administer the department. Each division shall be headed by a division administrator who shall be appointed by and serve at the pleasure of the director, and shall be a nonclassified employee exempt from the provisions of chapter 53, title 67, Idaho Code.
2. The director may pursuant to chapter 53, title 67, Idaho Code, appoint, employ, fix the compensation of, prescribe and require the duties of and discharge such employees as the duties of his office may require.
3. The director may contract for and procure on a basis of fee and without giving such persons any status as an employee of this state, such independently contracting actuarial, technical, examining, and other similar professional services as the director may from time to time require for the discharge of his duties.

§ 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.

§ 41-208. Prohibited interests, rewards.

1. The director or any deputy, actuary, examiner, assistant or employee of the director shall not be a director, officer, or employee of any insurer or be financially interested in the business of any insurer, except as a policyholder or claimant under an insurance policy or by reason of rights theretofore vested in commissions, fees, or retirement benefits related to services theretofore performed; nor shall any such individual engage in any other business or occupation interfering with or inconsistent with the duties of his office or employment, or serve on or under any political committee or take an active part in any political campaign on behalf of any candidate or party; that as to matters wherein a conflict of interests does not exist on the part of any such individual, the director may employ or retain from time to time insurance actuaries, examiners, accountants, attorneys or other technicians who are independently practicing their professions even though from time to time similarly employed or retained by insurers or others.
2. Except as provided in section 41-209[, Idaho Code], no person shall directly or indirectly give or pay to the director, or any deputy, actuary, examiner, assistant or employee of the director, and the director or his deputy, actuary, examiner, assistant or employee shall not directly or indirectly receive or accept, any fee, compensation, loan, gift, or other thing of value in addition to the compensation and expense allowance provided by law, for any service rendered or to be rendered as such director, deputy, actuary, examiner, assistant or employee or in connection therewith, or for services rendered or to be rendered in relation to legislation, or for extra services rendered or to be rendered, or for any cause whatsoever related, to any person who is subject to the supervision of the director under this code.
3. Subsections (1) and (2) shall not be deemed to prohibit:
   1. Receipt by any such individual of fully vested commissions or fully vested retirement benefits to which he is entitled by reason of services performed prior to becoming director or prior to employment by the director; or
   2. Investment in shares of regulated diversified investment companies; or
   3. Mortgage loans made under customary terms and in the ordinary course of business.

§ 41-209. Professional services.

1. Upon a domestic insurer’s written request to the director, the director may authorize an examiner, actuary, or other insurance technician appointed or employed by the director, to render to the insurer such professional or technical services as may not otherwise be reasonably obtainable from professional sources within this state.
2. Compensation for services so actually rendered shall be in such reasonable amount as may be agreed upon between the insurer and the individual performing the services. Such individual shall file a copy of his statement for services with the director before delivery of the same to the insurer or payment thereof.

§ 41-210. General powers, duties.

1. The director shall enforce the provisions of this code, and shall execute the duties imposed upon him by this code.
2. The director shall have the powers and authority expressly conferred upon him by or reasonably implied from the provisions of this code.
3. The director may conduct such examinations and investigations of insurance matters, in addition to examinations and investigations expressly authorized, as he may deem proper to determine whether any person has violated any provision of this code or to secure information useful in the lawful administration of any such provision. The cost of such additional examinations and investigations shall be borne by the state.
4. For any document required to be filed with the director or the department of insurance under the laws of this state, the director may specify the place and manner of filing of the document, including whether an electronic or paper filing is required or acceptable.
5. The director shall have such additional powers and duties as may be provided by other laws of this state.

§ 41-211. Rules.

1. The director may make reasonable rules necessary for or as an aid to the effectuation of any provision of this code. No such rule shall extend, modify, or conflict with any law of this state or the reasonable implications thereof.
2. Any such rule affecting persons or matters other than the personnel or the internal affairs of the department shall be made or amended in accordance with the provisions of chapter 52, title 67, Idaho Code.
3. In addition to any other penalty provided, wilful violation of any such rule shall subject the violator to such suspension or revocation of certificate of authority or license as may be applicable under this code as for violation of the provision as to which such rule relates.

§ 41-212. Orders, notices.

1. Orders and notices of the director shall be effective only when in writing signed by him or by his authority.
2. Every such order shall state its effective date, and shall concisely state:
   1. Its intent or purpose.
   2. The grounds on which based.
   3. The provisions of this code pursuant to which action is taken or proposed to be taken; but failure to so designate a particular provision shall not deprive the director of the right to rely thereon.
3. Except as may be provided in this code respecting particular procedures, an order or notice may be given by:
   1. Personal service upon the person to be ordered or notified;
   2. Mailing it, postage prepaid, by regular United States mail, or by certified mail, return receipt requested, addressed to the person at his residence or principal place of business as last of record in the department; or
   3. Where a party has appeared in a contested case or has not yet appeared but has consented or agreed in writing to service by facsimile transmission (FAX) or e-mail as an alternative to personal service or service by mail, such orders or notices may be served by FAX or by e-mail in lieu of service by mail or personal service.
4. Service of orders and notices is complete when a copy is personally served upon the person to be served, or when a copy properly addressed and postage prepaid is deposited in the United States mail or the statehouse mail, if the person is a state employee or state agency, or when there is an electronic verification that a FAX or an e-mail has been sent.

§ 41-213. Enforcement.

1. The director may institute such suits or other lawful proceedings as he may deem necessary for the enforcement of any provision of title 41, Idaho Code. If the director believes that any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of title 41, Idaho Code, any other law the director has authority to enforce, or any rule or order of the director, the director may, in accordance with the procedures set forth in title 41, Idaho Code, and chapter 52, title 67, Idaho Code:
   1. Issue an order requiring the person to cease and desist from any prohibited act or practice;
   2. Issue an order affecting a person’s license for such reasons as set forth in title 41, Idaho Code;
   3. Issue an order imposing an administrative penalty as provided in title 41, Idaho Code; and
   4. Initiate any action in district court for the same relief or any relief authorized by title 41, Idaho Code.
2. If the director believes that any person is violating or about to violate any provision of title 41, Idaho Code, or any order or requirement of the director issued or promulgated pursuant to authority expressly granted the director by any provision of title 41, Idaho Code, or by other law, the director may bring an action against such person in the name of the people of the state of Idaho in a district court of this state to enjoin such person from continuing such violation or doing any act in furtherance thereof. In the action the court may enter such order or judgment granting such preliminary or final injunction as the court determines to be proper.
3. If the director has reason to believe that any person has violated any provision of title 41, Idaho Code, or any provision of other law as applicable to insurance operations, for which criminal prosecution is provided and would be in order, he shall give the information relative thereto to the attorney general or county attorney having jurisdiction of any such violation. The attorney general or county attorney shall promptly institute such action or proceedings against such person as the information may require or justify.
4. Whenever the director may deem it necessary, he shall employ counsel, or call upon the attorney general of this state for legal counsel and such assistance as may be necessary.

§ 41-214. Records — Reproduction — Destruction.

1. The director shall preserve in permanent form records of his proceedings and hearings and including a concise statement of the results of any investigations or examinations of insurers, and shall file such records in the department.
2. The records and insurance filings in the department shall be open to public inspection, except as otherwise provided by this code.
3. The director may photograph, microphotograph or reproduce on film, whereby each page will be reproduced in exact conformity with the original except as to dimensions, financial statements of insurers, reports of business transacted in this state by foreign insurers, reports of examination of insurers, and such records and documents on file in his office as he may in his discretion select.
4. The director may destroy unneeded or obsolete records and filings of the department in accordance with provisions and procedures applicable to administrative agencies of this state in general.

§ 41-215. Use of reproductions and certified copies as evidence.

1. Photographs or microphotographs in the form of film or prints of documents and records made under section 41-214(3)[, Idaho Code,] shall have the same force and effect as the originals thereof, and duly certified or authenticated reproductions of such photographs or microphotographs shall be as admissible in evidence as are the originals.
2. Upon request of any person and payment of the applicable fee, the director shall furnish a certified copy of any record in his office which is then subject to public inspection.
3. Copies of original records or documents in his office certified by the director shall have the same effect and force and be received in evidence in all courts equally and in like manner as if they were originals.

§ 41-216. Director’s annual report.

As early after July 1 as is consistent with full and accurate preparation the director annually shall transmit to the governor a report of his official transactions containing with respect to the calendar year next preceding:

1. A list of all authorized insurers transacting insurance in this state, showing as to each insurer the name, location, amount of capital (if a stock insurer) or surplus (if a mutual or reciprocal insurer), date of incorporation or formation, date of commencement of business, and kinds of insurance transacted.
2. A condensed form of financial statements and reports of every authorized insurer for the calendar year, as audited and corrected by the director, arranged in tabular form or in abstracts.
3. A list of insurers whose business in this state was terminated and the reason for such termination; and if such termination was a result of liquidation, or of delinquency proceedings brought against the insurer in this or any other state, the amount of the insurer’s assets and liabilities so far as the same are known to the director.
4. A statement of the operating expenses of the department, including salaries, transportation, communication, printing, office supplies, fixed charges (insurance and bonds) and miscellaneous expense.
5. A detailed statement of the moneys and fees received by the department and from what source.
6. Any recommendations for amendments or supplementations to insurance laws which, in the director’s opinion, may be desirable.
7. Such other pertinent information and matters as the director deems to be in the public interest.

§ 41-217. Publications authorized.

The director shall publish, by printing or other suitable form of reproduction:

1. Pamphlet or booklet copies of the insurance laws of this state;
2. The director’s annual report;
3. Such copies of results of investigations or examinations of insurers for public distribution as he deems to be in the public interest;
4. Such compilations as he deems advisable from time to time of the general orders of the director then in force; and
5. Such other material as he may compile and deem relevant and suitable for the more effective administration of this code.

§ 41-218. Publications — Sale.

1. The director shall fix a price at not less than cost of distribution and printing or other reproduction, to be paid by persons requesting copies of the insurance laws and such other publications referred to in section 41-217[, Idaho Code,] as he deems proper to sell on behalf of the state rather than distribute free of charge on a basis of reciprocity.
2. The director shall account for and deposit all moneys so received in the same manner as applies under section 41-406[, Idaho Code,] to fees and taxes collected by him.

§ 41-219. Examination of insurers.

1. For the purpose of determining its financial condition, ability to fulfill and manner of fulfillment of its obligations, the nature of its operations, and compliance with the law, the director shall examine the affairs, transactions, accounts, records, and assets of each authorized insurer, including the attorney in fact of a reciprocal insurer in so far as insurer transactions are concerned, as often as he deems advisable. The director or any of the director’s examiners may conduct an examination, in accordance with the provisions of this section, of any company as often as the director in his sole discretion deems appropriate but shall, at a minimum, conduct an examination of every insurer licensed in this state not less frequently than once every five (5) years. In scheduling and determining the nature, scope and frequency of the examinations, the director shall consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants and other criteria as set forth in the examiners’ handbook adopted by the national association of insurance commissioners and in effect when the director exercises discretion under the provisions of this section.
2. Examination of an alien insurer shall be limited to its insurance transactions, assets, trust deposits and affairs in the United States except as otherwise required by the director.
3. The director shall in like manner examine each insurer applying for an initial certificate of authority to transact insurance in this state.
4. In lieu of an examination under the provisions of this section, of any foreign or alien insurer licensed in this state, the director may accept an examination report on the company as prepared by the insurance department for the company’s state of domicile or port of entry until January 1, 1994. Thereafter, such reports may only be accepted if the insurance department was at the time of the examination accredited under the national association of insurance commissioners’ financial regulation standards and accreditation program or, the examination is performed under the supervision of an accredited insurance department or with participation of one (1) or more examiners who are employed by such an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.
5. The term “company” as used in this section shall mean any person engaging in or proposing or attempting to engage in any transaction or kind of insurance or surety business and any person or group of persons who may otherwise be subject to the administrative, regulatory or taxing authority of the director.

§ 41-220. Examination of agents, brokers, consultants, managers, adjusters, promoters.

For the purpose of ascertaining compliance with law, and in addition to any right of examination otherwise provided, the director may as often as he deems advisable examine the accounts, records, documents, and transactions, pertaining to or affecting its insurance affairs or proposed insurance affairs, of:

1. any insurance agent, broker, solicitor, consultant, surplus line broker, general agent, or adjuster.
2. Any person[s] having a contract under which he enjoys in fact the exclusive or dominant right to manage or control an insurer.
3. Any person holding the shares of voting stock or policyholder proxies of a domestic insurer, for the purpose of controlling the management thereof, as voting trustee or otherwise.
4. Any person engaged in this state in, or proposing to be engaged in this state in, or holding himself out in this state as so engaging or proposing, or in this state assisting in, the promotion or formation of an insurer or insurance holding corporation, or corporation to finance an insurer or the production of its business.

§ 41-221. Place of examination.

1. The examination may be conducted by the director or his accredited examiners at the offices wherever located of the person being examined and at such other places as may be required for determination of matters under examination.
2. In the case of alien insurers the examination may be so conducted in the insurer’s United States offices and at places within the United States, except as otherwise required by the director.

§ 41-222. Examination cooperation with other states.

As far as practical the director shall conduct the examination of a foreign or alien insurer in cooperation with the insurance supervisory officials of other states in which the insurer transacts business, and for the purpose thereof may participate in joint examinations of insurers or be represented in an examination by an examiner of another state.

§ 41-223. Conduct of examination — Access to records — Correction of accounts — Removal of records.

1. Upon determining that an examination should be conducted, the director or the director’s designee shall issue an examination warrant appointing one (1) or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the examiners’ handbook adopted by the national association of insurance commissioners. The director may also employ such other guidelines or procedures as the director may deem appropriate.
2. Upon such examination the director or examiner may examine under oath any officer, agent, or other individual deemed to have material information regarding the affairs of the person under examination.
3. Every person being examined, its officers, attorneys, employees, agents, representatives or others having custody or control thereof, shall make freely available to the director or his examiners the accounts, records, documents, files, information, assets and matters in his possession or control relating to the subject of the examination, and shall facilitate the examination.
4. If the director finds any accounts or records to be inadequate or incorrectly kept or posted, he may procure the services of competent persons to reconstruct, rewrite, post or balance them at the expense of the person being examined if such person has failed to maintain, complete or correct such records or accounts after the director has given him notice and a reasonable opportunity to do so.
5. Neither the director nor any examiner shall remove any record, account, document, file or other property of the person being examined from the offices of such person except with the written consent of such person being given in advance of such removal, or pursuant to an order of court duly obtained. This provision shall not be deemed to affect the making and removal of copies or abstracts of any such record, account, document, or file.
6. Nothing contained in this chapter shall be construed to limit the director’s authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state.
7. Nothing contained in this chapter shall be construed to limit the director’s authority to use any final examination report, or to use any examiner or company work papers or other documents, or any other information discovered or developed during the course of any examination in any judicial proceeding or administrative proceeding under this chapter.

§ 41-224. Examination — Appraisal of asset.

1. If the director deems it necessary to value any asset involved in such an examination, he may make written request of the person being examined to appoint one or more appraisers who by reason of education, experience or special training are competent to appraise such asset. Any such appraiser shall be subject to the written approval of the director. If no such appointment is made within ten (10) days after the request therefor was delivered to such person, the director may appoint the appraiser or appraisers.
2. Any such appraisal shall be promptly made, and a copy of the report thereof shall be furnished to the director.
3. The reasonable expense of the appraisal shall be borne by the person being examined.

§ 41-225. Obstruction of examination — Penalty.

Any individual who wilfully obstructs the director or his examiner in the conduct of any examination authorized by this chapter shall be guilty of a misdemeanor and upon conviction shall be punished as provided in section 41-117[, Idaho Code] (general penalty).

§ 41-226. Examiners — Qualifications.

For the conduct of or assistance in examinations under this chapter the director shall appoint as examiners only individuals who by reason of education, experience, or special training are competent to perform the duties and fulfill the responsibilities of an insurance examiner. In the selection of examiners the director shall give due consideration to standards and qualifications therefor recommended by the National Association of Insurance Commissioners or any successor organization thereto. The director may appoint, employ, fix the compensation of, prescribe and require the duties of and discharge such examiners as the duties of his office may require. Examiners who are employees of the department shall be nonclassified employees exempt from the provisions of chapter 53, title 67, Idaho Code.

§ 41-227. Examination report.

1. The director or his examiner shall make a full and true written report of every examination made by him under this chapter, and shall verify the report by his oath.
2. The report shall comprise only facts appearing upon the books, papers, records or documents of the person being examined, or ascertained from testimony of individuals under oath concerning the affairs of such person, together with such conclusions and recommendations as may reasonably be warranted from such facts.
3. Prior to a hearing and prior to any modifications the report shall be subject to disclosure according to chapter 1, title 74, Idaho Code.
4. No later than sixty (60) days following completion of the examination, the examiner in charge shall file with the department a verified written report of examination under oath. Upon receipt of the verified report, the department shall transmit the report to the company examined, together with a notice which shall afford the company examined a reasonable opportunity of not more than thirty (30) days to make a written submission or rebuttal with respect to any matters contained in the examination report.
5. Within thirty (30) days of the end of the period allowed for the receipt of written submissions or rebuttals, the director shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner’s work papers, and enter an order:
   1. Adopting the examination report as filed or with modifications or corrections. If the examination report reveals that the company is operating in violation of any law, regulation or prior order of the director, the director may order the company to take any action the director considers necessary and appropriate to cure such violation;
   2. Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation or information, and refiling pursuant to subsection (2)[(4)] of this section; or
   3. Calling for an investigatory hearing with no less than twenty (20) days’ notice to the company for purposes of obtaining additional documentation, data, information and testimony.
6. 1. All orders entered pursuant to subsection (5)(a) of this section shall be accompanied by findings and conclusions resulting from the director’s consideration and review of the examination report, relevant examiner work papers and any written submissions or rebuttals. Any such order shall be considered a final order and may be appealed pursuant to sections 67-5270 through 67-5279, Idaho Code, and shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within thirty (30) days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders. (6)(a) All orders entered pursuant to subsection (5)(a) of this section shall be accompanied by findings and conclusions resulting from the director’s consideration and review of the examination report, relevant examiner work papers and any written submissions or rebuttals. Any such order shall be considered a final order and may be appealed pursuant to sections 67-5270 through 67-5279, Idaho Code, and shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within thirty (30) days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.
   2. Any hearing conducted under subsection (5)(c) of this section by the director or authorized representative, shall be conducted in accordance with the provisions of chapter 52, title 67, Idaho Code, as a nonadversarial confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies or disputed issues apparent upon the face of the filed examination report or raised by, or as a result of, the director’s review of relevant work papers or by the written submission or rebuttal of the company. Within twenty (20) days of the conclusion of any such hearing, the director shall enter an order pursuant to the provisions of subsection (5)(a) of this section. (c) The director shall not appoint a contract examiner or an employee of the department as an authorized representative to conduct the hearing. Nothing contained in this section shall require the department to disclose any information or records which would indicate or show the content of any investigation or activity of a criminal justice agency, except to the extent that the director relied upon information furnished to the director by such criminal justice agency in making his decision.
7. The report when so verified and filed shall be admissible in evidence in any action or proceeding brought by the director against the person examined, or against its officers, employees or agents, and shall be presumptive evidence of the material facts stated therein. The director or his examiners may at any time testify and offer other proper evidence as to information secured or matters discovered during the course of an examination, whether or not a written report of the examination has been either made, furnished or filed in the department.
8. After an order is entered under the provisions of subsection (5)(a) of this section, the director may publish the report or the results of the examination as contained therein which report or results are a public record and shall be exempt from the exemptions from disclosure provided in chapter 1, title 74, Idaho Code.
9. Nothing contained in this chapter shall prevent or be construed as prohibiting the director from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the insurance department of this or any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, so long as the agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this chapter.
10. All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the director or any other person in the course of an examination made under the provisions of this chapter shall be made available to the person or company which was the subject of the examination in proceedings pursuant to chapter 52, title 67, Idaho Code, but shall otherwise be held by the director as a record not required to be made public pursuant to exemptions from disclosure provided in chapter 1, title 74, Idaho Code.

§ 41-228. Examination expense.

1. Every insurer or corporation so examined shall, at the direction of the director, pay the actual travel expenses, reasonable living expense allowance, and compensation, at reasonable rates customary for such examination and as approved by the director, necessarily incurred on account of the examination, upon presentation of a detailed account of such charges and expenses.
2. No person shall pay and no examiner shall accept any additional emolument on account of any examination.
3. An insurer shall be entitled to offset against its premium taxes payable to the department of insurance of the state of Idaho the examination expense paid by it to or for the account of an examiner, actuary, or other assistant designated by the director for the purpose of the examination, inclusive of such personnel as may be so designated on behalf of other states participating in any such examination. The offset, or any remaining portion thereof, will be allowed for any of the five (5) calendar years following the year in which such examination expense was paid.

§ 41-229. Witnesses and evidence.

1. As to the subject of any examination, investigation, or hearing being conducted by him the director or any deputy or examiner appointed by him may administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, and shall have the power to subpoena witnesses, compel their attendance and testimony, and require by subpoena the production of books, papers, records, files, correspondence, documents and other evidence which he deems relevant to the inquiry.
2. If any individual refuses to comply with any such subpoena or to testify as to any matter concerning which he may be lawfully interrogated, the district court of the county wherein such examination, investigation, or hearing is being conducted or of the county wherein such individual resides, on the director’s application may issue an order requiring such individual to comply with the subpoena and to testify; and failure to obey such an order may be punished by the court as a contempt thereof.
3. Subpoenas shall be served, and proof of such service made, in the same manner as if issued by a district court. Witness fees and mileage, if claimed, shall be allowed the same as for testimony in a district court.
4. Any individual wilfully testifying falsely under oath as to any matter material to any such examination, investigation or hearing shall upon conviction thereof be guilty of perjury and shall be punished accordingly.

§ 41-230. Testimony compelled — Immunity from prosecution.

1. If any person asks to be excused from attending or testifying or from producing any books, papers, records, contracts, documents, or other evidence in connection with any examination, hearing, or investigation being conducted by the director, his deputy or examiner, or in any proceeding or action before any court or magistrate upon a charge of violation of this code, on the ground that the testimony or evidence required of him may tend to incriminate him or subject him to a penalty or forfeiture, and shall notwithstanding be directed to give such testimony or produce such evidence, he must, if so directed by the director and the attorney general, nonetheless comply with such direction; and he shall not be exempt from the refusal, suspension, or revocation of any license, permission, or authority conferred, or to be conferred, pursuant to this code. After complying, and if, but for this section, he would have been privileged to withhold the answer given or the evidence produced by him, the answer given, or evidence produced, and any information directly or indirectly derived from the answer or evidence, may not be used against the compelled person in any manner in a criminal case, except that he may nevertheless be prosecuted or subjected to penalty or forfeiture for any perjury, false swearing or contempt committed in answering or failing to answer, or in producing or failing to produce, evidence in accordance with the order.
2. Any such individual may execute, acknowledge and file in the department a statement expressly waiving such immunity or privilege in respect to any transaction, matter or thing specified in such statement, and thereupon the testimony of such individual or such evidence in relation to such transaction, matter, or thing may be received or produced before any judge or justice, court, tribunal, magistrate, grand jury or otherwise, and if so received or produced such individual shall not be entitled to any immunity or privileges on account of any testimony he may so give or evidence so produced.

§ 41-231. Hearings and appeal — Scope of provisions.

Except as otherwise provided in title 41, Idaho Code, and to the extent not inconsistent therewith, chapter 52, title 67, Idaho Code, shall apply as to all hearings and as to all appeals from the director relative to any matter treated in this code.

§ 41-232. Hearings in general.

1. The director may hold a hearing which he deems necessary for any purpose within the scope of this code.
2. The director shall hold a hearing:
   1. If required by any provision of this code; or
   2. Upon written demand for a hearing by a person aggrieved by any act, threatened act or failure of the director to act, or by any report, rule, regulation or order of the director (other than an order for the holding of a hearing, or an order on a hearing of which hearing such person had actual notice or pursuant to such order).
3. Any such demand for a hearing shall summarize the information and grounds to be relied upon as a basis for the relief to be sought at the hearing.
4. The director shall hold such demanded hearing within thirty (30) days after his receipt of the demand, unless postponed by mutual consent. Failure to hold the hearing shall constitute a denial of the relief sought, and shall be the equivalent of an order on hearing for the purpose of an appeal.
5. In any administrative proceeding of the director where a hearing is otherwise authorized or required by law, if a party with respect to whom the hearing is to be held waives the hearing in writing, or fails to plead, or to defend or prosecute, as the case may be, and that fact is made known to the director by affidavit or otherwise, the right of hearing shall be deemed to have been waived, and, any other provision of this code to the contrary notwithstanding, without holding or concluding a hearing the director may, upon satisfactory proof of service of the petition or complaint upon such a party, enter an order which shall be as lawful as to such party as if all allegations in the petition or complaint relative to or concerning such party were proved or admitted at a hearing. For good cause shown, the director may, in his discretion, set aside any order so entered, and the proceedings may continue as if no waiver or default had existed.

§ 41-232A. Hearings upon the denial, nonrenewal, suspension or revocation of a certificate of authority or license or imposition of administrative penalties.

1. In the event the director denies an applicant’s application for a certificate of authority or for a license, the director shall notify the applicant in writing of the basis for the denial. Within twenty-one (21) days of the issuance of the notice of denial, the applicant may submit to the director a written request for a hearing before the director or his duly appointed representative addressing the basis for the denial of the application and requesting that the director reexamine the applicant’s qualifications for a certificate of authority or a license. An applicant’s failure to request a hearing in writing within twenty-one (21) days of the issuance of the notice of denial shall be deemed a waiver of the opportunity for hearing.
2. Except as otherwise provided in title 41 and chapter 52, title 67, Idaho Code, prior to the director’s nonrenewal, suspension or revocation of a certificate of authority or license or imposition of any administrative penalty, the director shall provide the insurer or licensee, and any appointing insurers that have appointed the licensee as an agent, with advance written notice of the nature of the violations alleged or the charges pending against the insurer or licensee and affording the insurer or licensee an opportunity for a hearing thereon. Within twenty-one (21) days of the issuance of the notice of violations or charges, the insurer or licensee may submit to the director a written request for a hearing before the director or his duly appointed representative addressing the alleged violations and charges pending against the insurer or licensee. An insurer’s or licensee’s failure to request a hearing or otherwise dispute the notice in writing within twenty-one (21) days of the issuance of the notice of violations or charges shall be deemed a waiver of the opportunity for hearing.
3. All hearings under this section shall be conducted in accordance with the provisions set forth in this chapter and chapter 52, title 67, Idaho Code.

§ 41-233. Stay of action. [Repealed.]

§ 41-234. Place of hearing — Admission of public.

The hearing shall be held at the place designated by the director, and at his discretion it may be open to the public.

§ 41-235. Notice of hearing.

1. Except where a longer period of notice is provided by other provisions of this code relative to particular matters, not less than fourteen (14) days in advance the director shall give notice of the time and place of the hearing, stating the matters to be considered thereat. If the persons to be given notice are not specified in the provision pursuant to which hearing is held, the director shall give such notice to all persons whose pecuniary interests are to be directly and immediately affected by such hearing.
2. If any such hearing would otherwise require separate notices to more than one hundred (100) persons, in lieu of the notice required under such subsection the director may give notice of the hearing by publishing the notice in at least three (3), but not to exceed five (5), daily newspapers, at least once each week during the four (4) weeks immediately preceding the week in which the hearing is to be held. The director shall select such newspapers, as to location and circulation, as he deems necessary to give adequate opportunity of notice to such persons as should receive notice of the hearing. The published notice shall state the time and place of the hearing and shall specify the matters to be considered thereat. At the time of first publication the director shall mail to every advisory organization which has filed with him pursuant to section 41-1425, Idaho Code, a copy of the published notice if the proposed hearing would affect any interest of the members of such advisory organization.
3. All such notices, other than published notices, shall be given as provided in section 41-212, Idaho Code.

§ 41-236. Show cause notice.

If any person is entitled to a hearing by any provision of the insurance code before any proposed action is taken, the notice of the proposed action may be in the form of a notice to show cause stating that the proposed action may be taken, unless such person shows cause at a hearing to be held as specified in the notice why the proposed action should not be taken, and stating the basis of the proposed action.

§ 41-237. Adjourned hearing.

The director may adjourn any hearing from time to time and from place to place without other notice of the adjourned hearing than announcement thereof at the hearing.

§ 41-238. Nonattendance.

The validity of any hearing held in accordance with the notice thereof shall not be affected by failure of any person to attend or to remain in attendance.

§ 41-239. Hearing procedure. [Repealed.]

§ 41-240. Order on hearing.

1. In the conduct of hearings under this code and making his order thereon, the director shall act in a quasi-judicial capacity.
2. Within thirty (30) days after termination of a hearing and completion of the transcript, if any, or of any rehearing thereof or reargument thereon, or within such other period as may be specified in this code as to particular proceedings, the director shall make his order on hearing and, subject to subsection (5) below, shall give a copy of the order to each person to whom notice of the hearing was given or required to be given and to any other person who became a party to the hearing by intervention.
3. The order shall contain a concise statement of the facts as found by the director, and of his conclusions therefrom, and the matters required by section 41-212[, Idaho Code] (orders, notices).
4. The order may confirm, modify, or nullify action taken under an existing order, or may constitute the taking of any new action coming within the scope of the notice of the hearing.
5. If notice of the hearing was given by publication as provided for in section 41-235[, Idaho Code], the director may publish the order on hearing once each week for four (4) consecutive weeks in the same newspapers in which such notice was published, the first such publication to be made on the date of the order. Publication of the order shall be in lieu of the giving of copies of the order as required under subsection (2) above. At time of first publication the director shall mail to every advisory organization which has filed with him pursuant to section 41-1425[, Idaho Code], a copy of the published order if the order would affect any interest of members of such advisory organization.

§ 41-241. Appeals from the director. [Repealed.]

§ 41-242. Method of appeal. [Repealed.]

§ 41-243 — 41-245. Record to court — Hearing the appeal — Stay of action on appeal. [Repealed.]

§ 41-246. Appeals to Supreme Court. [Repealed.]

§ 41-247. Inquiry powers of director.

The director shall have power to direct an inquiry in writing to any person subject to his jurisdiction with respect to any insurance transaction or matter relative to a subject of insurance resident, located, or to be performed in this state. The person to whom such an inquiry is addressed shall upon receipt thereof promptly furnish to the director all requested information which is in his possession or subject to his control.

§ 41-248. Interstate relations.

If the matter that the director seeks to obtain by request is located outside the state, the person so requested may make it available to the director or his representative to examine the matter at the place where it is located. The director may designate representatives, including officials of the state in which the matter is located, to inspect the matter on his behalf, and he may respond to similar requests from officials of other states.

§ 41-249. Sharing of information among governmental agencies and the national association of insurance commissioners.

1. Any document, report, or other recorded information provided to the director by any federal, state or foreign regulatory or law enforcement agency, or any combination thereof, or by the national association of insurance commissioners (NAIC), which is marked “confidential” or “for regulator use only” or by similar terms or concerning which the entity requires written assurance that the director maintain such information in confidence before the entity will release the information, may be maintained by the director on a confidential basis and is not required to be disclosed to the public.
2. The director may provide any document, report, or other recorded information to any federal, state or foreign regulatory or law enforcement agency, or any combination thereof, or to the NAIC, which is marked “confidential” or “for regulator use only” or by similar terms or concerning which the director requires written assurance that the entity maintain such information in confidence before he will release it to such entity.
3. The director is authorized to enter into agreements with other governments, agencies, or any combination thereof, or with the NAIC, in connection with his duties and responsibilities pursuant to this section.
4. The application of this section shall not prevent an insurance company or producer or other licensee from obtaining information used by the department of insurance in making regulatory decisions or taking regulatory action affecting the company consistent with chapter 1, title 74, Idaho Code, and title 41, Idaho Code.

§ 41-250. [Amended and Redesignated.]

§ 41-251. Civil liability. [Repealed.]

§ 41-252. Cooperation between the director of the department of insurance and the director of the department of law enforcement. [Repealed.]

§ 41-253. Statement of purpose — Adoption of international fire code.

1. The purpose of sections 41-253 through 41-269, Idaho Code, is to protect human life from fire, and to prevent fires. These sections are intended to prescribe regulations consistent with nationally recognized good practice for the safeguarding of life and property from hazards of fire and explosion arising from the storage, handling and use of hazardous substances, materials, and devices, and from conditions hazardous to life or property in the use or occupancy of buildings or premises, and there is hereby adopted the “International Fire Code,” 2000 edition, with appendices thereto, published by the International Code Council, Inc. and such later editions as may be so published and adopted by the state fire marshal, as the minimum standards for the protection of life and property from fire and explosions in the state of Idaho.
2. A detached single family dwelling, to be constructed upon lands of five (5) acres or more outside an incorporated city and not within a designated area of city impact, shall be exempt from the water supply and access requirements of the adopted version of the International Fire Code unless a county land use or subdivision ordinance requires such compliance. A county adopted ordinance may expand the foregoing exemption applicable to detached single family dwellings by reducing the minimum parcel area requirement after first conducting a public hearing subject to public notice that complies with the requirements set forth in section 67-6509, Idaho Code, and after providing notice by mail to all fire agencies providing services to areas outside an incorporated city and not within a designated area of city impact that might be affected by any such proposal at least twenty-one (21) days prior to such public hearing.
3. Assistants to the state fire marshal, as provided in section 41-256, Idaho Code, shall apply a reasonable interpretation to the International Fire Code as adopted by the state fire marshal, and rules of the state fire marshal, when undertaking any enforcement action.
4. For the purposes of sections 41-253 through 41-269, Idaho Code, the “International Fire Code” shall mean the publications as adopted under subsection (1) of this section.

§ 41-254. Powers and duties of state fire marshal — International fire code, enforcement and regulations — Reports.

The state fire marshal shall be appointed by the director of the department of insurance, with the approval of the governor and shall serve at the pleasure of the director. The state fire marshal shall have the following powers and duties:

1. To enforce the international fire code.
2. To prescribe regulations in addition to the international fire code as adopted, which may be deemed necessary for the prevention of fires and protection of life and property, and such regulations are to be enforced by the state fire marshal.
3. To make interpretations and rules of the intent of the various provisions of the international fire code as adopted.
4. To adopt, rescind, modify or amend rules and regulations for the exercise of functional powers and duties.
5. To transmit to the governor and legislature, on or before the 15th day of July of every year, a full report of proceedings under sections 41-253 through 41-269, Idaho Code, and such statistics as he may wish to include therein unless some other time for reporting is fixed by law, and such report shall be available to the public.
6. To make recommendations for amendments to the international fire code to be submitted to the promulgating authority for its consideration.
7. To have exclusive jurisdiction over single service integrated fire sprinkler systems. A “single service integrated fire sprinkler system” is defined as an integrated system of underground and overhead piping, valves and sprinklers used exclusively for fire protection purposes and designed in accordance with fire protection engineering standards, including the international fire code, beginning with the first connection to a public water system regardless of the existence or location of a back flow prevention device.
8. No person shall be eligible to serve as state fire marshal unless he:

1. Has had at least twelve (12) years’ full-time paid experience with a state, city or county fire protection agency whose primary function is fire prevention and structural fire safety, including at least five (5) years’ experience in an administrative capacity as the chief agency officer; or
2. Holds a four (4) year college degree in one of the physical sciences and has had at least five (5) years’ full-time experience in fire protection and structural fire safety with a fire protection agency; or
3. Is a member of the American society of fire protection engineers.

§ 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.

§ 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.

§ 41-257. State fire marshal as chief arson investigation officer.

The state fire marshal shall be the chief arson investigation officer in the state, and shall have the same responsibility and power in arson investigation as a county sheriff. He shall not, however, interfere at any time in the operation or administration of any fire department or sheriff’s office except in matters of fire prevention and arson investigation when requested by the local fire jurisdiction, sheriff’s office or written and signed complaint of any person served by the local fire jurisdiction. No person, acting without malice, shall be subject to civil liability for libel or otherwise, by virtue of the filing of complaints, requests, reports or furnishing other information pursuant to this section or required by the director of the department of insurance or the state fire marshal as a result of the authority herein granted.

§ 41-258. Report of losses by fire insurance companies to state fire marshal.

Every fire insurance company authorized to transact business in this state is hereby required to report to the office of the state fire marshal, within seven (7) days after settlement of all fire losses of one thousand dollars ($1,000) or more, on property within the state of Idaho and all fire losses resulting in death or personal injury, including those personal injury losses covered by workmen’s [worker’s] compensation insurance. The report shall state the date of fire, the amount of probable property loss or personal injury, the character of property destroyed or damaged, and supposed cause of the fire. The report shall be in addition to and not in lieu of any report or reports such companies may be required by any law of this state to make to any other state officer.

§ 41-259. Inspection of buildings — Order of remedy or removal — Service of order.

The state fire marshal, his deputies or assistants, upon the written and signed complaint of any person or whenever he or they shall deem it necessary, may at reasonable hours inspect buildings and premises within their jurisdiction, upon the presentation of proper credentials, except the interior of private dwellings, private garages appertaining to such residences, or buildings on farms of more than five (5) acres.

Whenever any of said officers shall find that any building or other structure which, for want of repairs, or lack of or insufficient fire escapes, automatic or other fire alarm apparatus or fire extinguishing equipment, or by reason of age or dilapidated condition, or due to violation of the International Fire Code or from any other cause, is especially liable to fire, and is so situated as to endanger life, other buildings or structures or said building or structure, he or they shall order the same to be remedied or removed, and such order shall forthwith be complied with by the owner or occupant of such premises or buildings, unless said owner or occupant avail himself of the appeals procedure set forth in this act.

The service of any such order shall be made upon the owner or occupant either by delivering to and leaving with the said person a true copy of the said order, or, by mailing such copy to the owner or occupant’s last known address. All mailings shall be registered or certified, with return receipt.

§ 41-260. Appeal from order of remedy or removal — Appeal from local appeal decision.

If an order to remedy or remove, or a local appeal decision regarding the interpretation of the International Fire Code or rules of the state fire marshal, is made by the deputies or assistants of the state fire marshal, such owner or occupant who receives the order, or a party aggrieved by a local appeal decision, may, within twenty (20) days after receipt of service of such order or local appeal decision, appeal to the state fire marshal, who shall within ten (10) days, review such order or local appeal decision and if affirmed, file his decision thereon, and unless by his authority the order or local appeal decision is revoked or modified it shall remain in full force and be complied with within the time fixed in said order, local appeal decision, or decision of the state fire marshal.

Provided, however, that any such owner, occupant or party who feels himself aggrieved by any such order or local appeal decision, or affirming of such order or local appeal decision, may within thirty (30) days after the making or affirming of any such order or local appeal decision by the state fire marshal, appeal such order or local appeal decision to the district court having jurisdiction of the property.

§ 41-261. Failure to comply with order of remedy or removal — Failure to comply with local decision or local appeal decision — Penalty — Civil action to recover penalty.

Any owner or occupant failing to comply with such order or local decision, or local appeal decision within thirty (30) days after said appeal to the state fire marshal has been determined, or, if no appeal is taken, then within the time fixed in said order, local decision or local appeal decision shall be liable to a penalty of: ten dollars ($10.00) for each day’s neglect beginning with the first day through the seventh day; fifty dollars ($50.00) per day on the eighth through the thirtieth day; and one hundred dollars ($100) per day on the thirty-first day and each day thereafter. In the event such enforcement action is brought by the office of the state fire marshal, the penalty shall be payable to the state fire marshal, for deposit in the arson, fire and fraud prevention account. In the event such enforcement action is brought by a fire district under the authority of the state fire marshal, the penalty shall then be payable to the fire district which has prosecuted the enforcement action.

The penalty herein provided, if not then paid, may be recovered in an action brought in any court of competent jurisdiction of the county where such property is located, in the name of the state, under the direction of the state fire marshal and/or any of the assistants herein designated, where such property is located, or by an attorney specially designated therefor by the attorney general, or by the attorney for a fire district in the event such enforcement action is brought by the district. The reasonable attorney’s fees and costs incurred in bringing any such enforcement action, if any, shall be awarded to the state or the fire district bringing the enforcement action in addition to the assessment of any penalty, and shall be paid in the same manner as the penalty. If the court determines that the enforcement action has been brought frivolously or without reasonable cause, the court may award to the owner, occupant or party who is the subject of the enforcement action such reasonable attorney’s fees and costs of the defense or appeal of the enforcement action as the court determines is fair and just.

§ 41-262. Failure to comply with order of remedy or removal — Repair or demolition of premises — Expense.

If any person fails to comply with the order of any officer, the state fire marshal or assistants to the state fire marshal under the preceding sections or with the order as modified on appeal as herein provided, and within the time fixed, then such officer, the state fire marshal or assistants to the state fire marshal are hereby empowered and authorized to cause such building or premises to be repaired, torn down or demolished, with the materials removed and all dangerous conditions remedied, at the expense of the person who fails to comply with such order.

§ 41-263. Failure to pay expense of repair or demolition — Assessment.

If, within thirty (30) days thereafter, such person shall fail, neglect or refuse to repay the expenses for demolishing or repair of said building incurred under the provisions of this act, to the state fire marshal’s office if the demolition or repair action was brought by the state fire marshal, or to a fire district if a fire district brought the demolition or repair action, the enforcing officer, state fire marshal or his assistants shall certify such expenses to the clerk of the city, fire district or county in which the property is situated, and the city, fire protection district or county shall certify to the county treasurer the amount of the assessment, which assessment shall be by said county treasurer, placed upon the tax roll and collected as other taxes, and when collected shall be refunded to the state fire marshal for deposit in the arson, fire and fraud prevention account if the demolition or repair action was brought by the state fire marshal, or to a fire district if a fire district brought the demolition or repair action.

§ 41-264. Investigative hearings — Subpoena of witnesses — Conduct of hearing.

The state fire marshal or his deputies shall have the power to request the district court to subpoena witnesses and compel them to attend before them, or either of them, and to testify in relation to any matter which by the provisions of this act is subject to inquiry and investigation, and may require the production of any book, paper or document deemed pertinent or necessary to the inquiry, and shall have the power to administer oaths and affirmations to any person appearing as a witness before them. Any such hearing shall be held in the county where the property is located.

Such examination may be public or private, as the officers conducting the investigation may determine, and persons other than those required to be present may be excluded from the place where such examination is held.

If, after such examination of witnesses or any investigation, the state fire marshal or any of his deputies or assistants is of the opinion that the facts in relation to such fire indicate that a crime has been committed, the state fire marshal or any of his deputies or assistants shall present the testimony taken on such examination, together with any other data in his possession, to the prosecuting attorney of the proper county, with the request that the prosecuting attorney institute such criminal proceedings as such testimony or data may warrant.

§ 41-265. Witness fees — Charge for service of process.

Each person summoned and testifying before the state fire marshal, his deputies or assistants, shall on the certification of the fire marshal and upon audit of the proper officer of the state, receive such sum or sums for witness fees and mileage as are provided for witnesses testifying in the district courts of this state; and officers serving subpoena and rendering other services to the state fire marshal shall be paid in like manner and amounts as they would be entitled for like service in such courts.

§ 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.

§ 41-267. Hardship resulting from application of act

Adjustments and variances. [Repealed.]

§ 41-268. Arson, fire and fraud prevention account.

1. There is hereby created an account in the agency asset fund in the state treasury, to be designated the “arson, fire and fraud prevention account.” The account shall be used by the director of the department of insurance for enforcement of this act, investigation of alleged cases of arson, fraud and related alleged violations of the laws of this state, and prevention of fire, explosions and other conditions necessary for the public safety, health, peace and welfare.
2. In addition to moneys, if any, appropriated to the account by the legislature, the director shall deposit with the state treasurer for credit to the arson, fire and fraud prevention account:
   1. Penalties collected under the provisions of sections 41-261 and 41-263, Idaho Code;
   2. That portion of the annual continuation fee as determined by the director pursuant to subsection (3) of this section;
   3. Other moneys now or hereinafter in the state fire prevention account;
   4. Other moneys or revenues derived from whatever source for arson or fraud investigation or fire prevention.
3. A portion of the annual continuation fee, as determined by the director, will be used to fund the arson, fire and fraud [prevention] account.
4. All claims against the account shall be examined, audited and allowed in the manner now or hereafter provided by law.
5. All moneys placed in the account are hereby perpetually appropriated to the department of insurance for the purposes of the provisions of this section.
6. Pending use for purposes of the provisions of this section, moneys in the account shall be invested by the state treasurer in the same manner as provided under section 67-1210, Idaho Code, with respect to other surplus or idle moneys in the state treasury. Interest earned on the investments shall be returned to the account.

§ 41-269. Liberal construction of act.

It is hereby declared that this act is necessary for the public safety, health, peace and welfare, is remedial and preventive in nature, and shall be construed liberally.

§ 41-270. [Amended and Redesignated.]

§ 41-271. [Amended and Redesignated.]

§ 41-272. [Amended and Redesignated.]

§ 41-273. [Amended and Redesignated.]

§ 41-274. [Amended and Redesignated.]

§ 41-275. [Reserved.]

§ 41-286. Uniform claims processing.

1. Beginning July 1, 1995, all providers of health insurance coverage in Idaho shall use a uniform claim form/format and uniform billing and claim codes.
2. The uniform claim form/format and billing codes shall be promulgated by the director as provided in chapter 52, title 67, Idaho Code. The director, when developing the claim form/format and billing codes shall take into consideration forms/formats now in use and shall consult with appropriate federal, state and private organizations.
3. Beginning July 1, 1996, all insurers shall offer compatible systems of electronic billing approved by the director in accordance with chapter 52, title 67, Idaho Code. The system approved by the director may include monitoring and disseminating information concerning eligibility and coverage of individuals.

§ 41-287. Application of provisions adopted by national association of insurance commissioners.

The department may not require an insurer to comply with any rule, regulation, directive or standard adopted by the national association of insurance commissioners unless application of the rule, regulation, directive or standard, including policy reserves, is authorized by statute and implemented by the director pursuant to chapter 52, title 67, Idaho Code. This section shall not expand or restrict the general powers and authority of the director as set forth in section 41-210, Idaho Code.

§ 41-288. Retaliatory requirement.

Should an insurance department, commissioner, director, or other similar insurance regulatory official of any other state or territory of the United States, impose any sanctions, fines, penalties, financial or deposit requirements, prohibitions, restrictions, regulatory requirements, or other obligations, of any kind, upon any insurance company organized or chartered in this state and licensed to transact business in such other state or territory, because of the failure of the Idaho department of insurance to obtain, maintain, or receive accreditation, certification, or any similar form of approval, compliance, or acceptance from, by, or as a member of the national association of insurance commissioners, or any committee, task force, working group, or advisory committee thereof, or because of the failure of the Idaho department of insurance to comply with any directive, financial or annual statement requirement, model act or regulation, market conduct or financial examination report or requirement, or any report of any kind of the national association of insurance commissioners, or any committee, task force, working group, or advisory committee thereof, the director shall, without exception or exclusion, impose upon any and all insurance companies organized or chartered in such other state or territory, and licensed to do business in this state, the same sanctions, fines, penalties, financial or deposit requirements, prohibitions, restrictions, regulatory requirements, or other obligations imposed by such state upon the insurance company domiciled in this state.

§ 41-290. Fraudulent claims.

Any insurer which has facts to support a belief that a fraudulent claim is being or has been made shall, within sixty (60) days of the receipt of such notice, send to the director of insurance, on a form prescribed by the director, the information requested and such additional information relative to the claim and the parties claiming loss or damages as the director may require. The director of the department of insurance shall review such reports and select such claims as, in his judgment, may require further investigation. He shall then cause an independent examination of the facts surrounding such claim to be made to determine the extent, if any, to which fraud, deceit, or intentional misrepresentation of any kind exists in the submission of the claim. The director of the department of insurance shall report any alleged violations of law which his investigations disclose to the appropriate licensing agency and prosecuting authority having jurisdiction with respect to any such violation.

If, upon examination, the director of the department of insurance determines that an insurer has intentionally not reported a claim when the insurer had facts to support a belief that the claim was fraudulent in accordance with the provisions of this chapter, the director may impose fines and penalties pursuant to section 41-327, Idaho Code, for each unreported suspected fraudulent claim.

§ 41-291. Definitions.

As used in sections 41-290 through and including 41-298, Idaho Code:

1. Sections 41-290 through 41-298, Idaho Code, shall be known as the “Idaho Arson and Fraud Reporting-Immunity Act.”
2. “Authorized agencies” shall mean:
   1. Any law enforcement agency of this state;
   2. Any prosecuting attorney who may be responsible for prosecution in the jurisdiction where the fire or fraud occurred;
   3. The attorney responsible for the prosecution in the jurisdiction where the fire or fraud occurred as designated by the attorney general;
   4. The department of insurance, which includes the state fire marshal.
3. Solely for the purpose of section 41-292(1), Idaho Code, “authorized agencies [agency]” shall also include:
   1. The United States attorney’s office when authorized or charged with investigation or prosecution of the fire or fraud in question;
   2. The federal bureau of investigation or any other federal agency, charged with investigation or prosecution of the fire or fraud in question.
4. “Relevant” means information having any tendency to make the existence of any fact that is of consequence to the investigation or determination of the issue more probable or less probable than it would be without the evidence.
5. Material will be “deemed important,” if within the sole discretion of the “authorized agency,” such material is requested by the “authorized agency.”
6. “Action,” as used in this chapter, shall include nonaction or the failure to take action.
7. “Immunity” means that no civil action may arise against any person for furnishing information pursuant to section 41-248, 41-258, 41-290, 41-292, 41-296 or 41-297, Idaho Code, where actual malice on the part of the insurance company, department of insurance, state fire marshal, authorized agency, their employees or agents, is not present.
8. “Financial loss” includes, but is not limited to, loss of earnings, out-of-pocket and other expenses, repair and replacement costs and claims payments.
9. “Person” means a natural person, company, corporation, unincorporated association, partnership, professional corporation and any other legal entity.
10. “Practitioner” means a licensee of this state authorized to practice medicine and surgery, psychology, chiropractic, law or any other licensee of the state whose services are compensated, directly or indirectly, by insurance proceeds, or a licensee similarly licensed in other states and nations or the practitioner of any nonmedical treatment rendered in accordance with a recognized religious method of healing.
11. “Statement” includes, but is not limited to, any of the following regardless of how it is made and in what format it is contained:
    1. Information submitted on an application for insurance;
    2. Description of policy terms, conditions, benefits or illustrations;
    3. Proof of insurance, certificate of insurance, or insurance card;
    4. Proof of claim, proof of loss, bill of lading, receipt for payment, invoice, account, estimate of property damages, bill for services, diagnosis, prescription, hospital or medical records, X-rays, test results or other evidence of loss, injury or expense; and (e) Any other notice, correspondence, representation or information relating to an insurance coverage or claim.
12. “Insurer” shall mean any insurance company contemplated by title 41, Idaho Code, any business operating as a self-insured for any purpose, the state insurance fund, and any self-insured as contemplated by title 72, Idaho Code.
13. “Runner” means a person who procures, or persons working in conjunction with each other who procure, clients at the direction of, or in cooperation with, a person who, with the intent to deceive or defraud, performs or obtains a service or benefit under a contract of insurance or asserts a claim against an insured.

§ 41-292. Disclosure of information by insurers.

1. The director of the department of insurance, state fire marshal or any authorized agency may, in writing, require the insurance company at interest to release to the requesting agency any or all relevant information or evidence deemed important to the authorized agency, director or state fire marshal which the company may have in its possession, relating to the loss in question. Relevant information may include, without limitation herein:
   1. Pertinent insurance policy information relevant to a loss under investigation and any application for such a policy;
   2. Policy premium payment records which are available;
   3. History of previous claims made by the insured;
   4. Material relating to the investigation of the loss, including statements of any person, proof of loss, and any other evidence relevant to the investigation.
2. 1. When an insurance company has facts to support a belief that a loss in which it has an interest may be of other than accidental cause, then, for the purpose of notification and for having such loss investigated, the company shall, in writing, notify the director of the department of insurance, or the state fire marshal, and provide any or all material developed from the company’s inquiry into the loss. (2)(a) When an insurance company has facts to support a belief that a loss in which it has an interest may be of other than accidental cause, then, for the purpose of notification and for having such loss investigated, the company shall, in writing, notify the director of the department of insurance, or the state fire marshal, and provide any or all material developed from the company’s inquiry into the loss.
   2. When an insurance company provides the director of the department of insurance or the state fire marshal with notice of a loss, it shall be sufficient notice for the purpose of this chapter.
   3. Nothing in section 41-292(1), Idaho Code, shall abrogate or impair the rights or powers created under section 41-292(2), Idaho Code.
3. The director of the department of insurance, the state fire marshal or an authorized agency provided with information pursuant to section 41-248, 41-258, 41-290 or 41-292(1) or (2), Idaho Code, and in furtherance of its own purposes, may release or provide such information to any of the other authorized agencies.
4. Any insurance company providing information to an authorized agency or agencies pursuant to section 41-258, 41-290 or 41-292(1) or (2), Idaho Code, shall have the right to request relevant information relative to the loss in question and to receive, within a reasonable time, not to exceed thirty (30) days, the information requested, if the information is not otherwise privileged by law.
5. In the absence of fraud or malice, no person shall be subject to civil liability for libel, slander or any other relevant tort cause of action by virtue of filing reports or furnishing other information required by this chapter or required by the director of the department of insurance under the authority granted in this chapter, and no civil cause of action of any nature shall arise against such person:
   1. For any information relating to suspected fraudulent insurance acts furnished to or received from authorized agencies, their agents and employees; or
   2. For any information relating to suspected fraudulent insurance acts furnished to or received from other persons subject to the provisions of this chapter; or
   3. For any such information furnished in reports to the department of insurance, national association of insurance commissioners, national insurance crime bureau or any organization established to detect and prevent fraudulent insurance acts, their agents, employees or designees, nor shall the director or any employee of the department of insurance, acting without malice in the absence of fraud, be subject to civil liability for libel, slander or any other relevant tort and no civil cause of action of any nature shall arise against such person by virtue of the publication of any report or bulletin related to the official activities of the department of insurance. Nothing herein is intended to abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person. (6) For purposes of subsection (5) of this section, there shall exist a rebuttable presumption that the person has acted without fraud or malice.

§ 41-293. Insurance fraud.

Insurance fraud includes:

1. 1. Any person who, with the intent to defraud or deceive an insurer for the purpose of obtaining any money or benefit, presents or causes to be presented to any insurer, producer, practitioner or other person, any statement as part of, or in support of, a claim for payment or other benefit, knowing that such statement contains false, incomplete, or misleading information concerning any fact or thing material to such claim; or (1)(a) Any person who, with the intent to defraud or deceive an insurer for the purpose of obtaining any money or benefit, presents or causes to be presented to any insurer, producer, practitioner or other person, any statement as part of, or in support of, a claim for payment or other benefit, knowing that such statement contains false, incomplete, or misleading information concerning any fact or thing material to such claim; or
   2. Any person who, with intent to defraud or deceive an insurer assists, abets, solicits, or conspires with another to prepare or make any statement that is intended to be presented to any insurer, producer, practitioner or other person, in connection with, or in support of, any claim for payment or other benefit, knowing that such statement contains false, incomplete, or misleading information concerning any fact or thing material to such claim;
   3. Any person who, with intent to defraud or deceive, presents or causes to be presented to or by an insurer, a producer, practitioner or other person, a false or altered statement material to an insurance transaction;
   4. Any insurance producer or other person who, with intent to defraud or deceive, willfully takes premium money knowing that insurance coverage will not be effected;
   5. Any practitioner or other person who willfully submits a false or altered statement, with the intent of deceiving an insurer or other person in connection with an insurance transaction or claim;
   6. Anyone willfully making a false statement or material misrepresentation to an insurer, employer, practitioner or other person, with the intent to defraud or deceive an insurer or other person, to obtain or extend worker’s compensation benefits;
   7. Anyone who offers or accepts a direct or indirect inducement to file or solicits another person to file a false statement, with intent to defraud or deceive an insurer;
   8. Any person who, with intent to defraud or deceive, transacts insurance of any kind or character, or transmits for a person other than himself an application for a policy of insurance, without proper licensing or after such license has been suspended or revoked;
   9. Any practitioner or any other person who, with intent to defraud or deceive, employs, uses or acts as a runner for the purpose of submitting a claim containing false, incomplete, or misleading information concerning any fact or thing material to such claim;
   10. Any employer or other person who, with intent to defraud or deceive, presents or causes to be presented to an insurer, producer or any other person or governmental agency any statement containing the number of employees, amount of payroll, job description or job title or any other statement material to worker’s compensation insurance which contains false, misleading or incomplete information; or
   11. Any person who, with intent to defraud or deceive, obstructs the director in the conduct of any authorized examination.
2. A fact, statement or representation is “material” if it includes any of the following:
   1. Any fact which, if communicated to the producer, insurer, adjuster or representative thereof, would induce him to either decline insurance altogether or not accept it unless a higher premium is paid by the insured;
   2. Any fact relating to a claim for insurance benefits which, if disclosed, would be a fair reason for rejecting a claim for insurance benefits;
   3. Any fact, the knowledge or ignorance of which would naturally influence the insurer in making or refusing the contract, in estimating the degree or character of the risk, or in fixing the rate of premium;
   4. Any fact, the knowledge or ignorance of which would naturally influence the insurer in accepting or rejecting a claim for insurance benefits or compensation, or in determining the amount of compensation or insurance benefits to be paid to the insured; or
   5. Any fact that necessarily has some bearing on the subject matter of the insurance coverage or claim for benefits under an insurance contract.
3. Any offense committed by use of a telephone, any means of electronic communication or mail as provided by this chapter may be deemed to have been committed at the place from which the telephone call or electronic communication was made, or mail was sent, or the offense may be deemed to have been committed at the place at which the telephone call, electronic communication or mail was received.
4. Any violator of this section is guilty of a felony and shall be subject to a term of imprisonment not to exceed fifteen (15) years, or a fine not to exceed fifteen thousand dollars ($15,000), or both and shall be ordered to make restitution to the insurer or any other person for any financial loss sustained as a result of a violation of this section. Each instance of violation may be considered a separate offense.

§ 41-294. Damage to or destruction of insured property.

Any person who wilfully burns or in any other manner injures or destroys any property which is at the time insured against loss or damage, with intent to defraud or prejudice the insurer or for personal gain, whether the same be the property of, or in possession of, such person or any other, is guilty of a felony punishable by imprisonment in the state prison not less than one (1) year nor more than fifteen (15) years, and shall be ordered to make restitution to the insurer or any other person for any financial loss sustained as a result of a violation of this section.

§ 41-296. Confidentiality — Compulsory testimony.

1. The department of insurance, state fire marshal or authorized agency described in section 41-291, Idaho Code, which has received any information furnished pursuant to section 41-258, 41-290 or 41-292, Idaho Code, shall hold the information and the information shall be subject to disclosure according to chapter 1, title 74, Idaho Code.
2. Any authorized agency referred to in section 41-291, Idaho Code, or their personnel, may be required to testify in any litigation in which the insurance company at interest is named as a party, if such testimony is not otherwise privileged by law.

§ 41-297. Disclosure requirements.

1. No person or agency shall intentionally or knowingly refuse to release any information requested pursuant to section 41-292(1) or (3), Idaho Code.
2. No person shall intentionally or knowingly refuse to provide authorized agencies relevant information pursuant to section 41-292(2), Idaho Code.
3. No person shall fail to hold in confidence information required to be held in confidence by section 41-296, Idaho Code.
4. Whoever violates subsection (1), (2) or (3) of this section, is guilty of a misdemeanor, and upon conviction, shall be punished by a fine not to exceed one thousand dollars ($1,000). In addition to any criminal penalty, if the person is an insurance company or other person licensed by or regulated by the director of insurance, the director may, after hearing thereon, impose an administrative penalty on the violator not to exceed five thousand dollars ($5,000).

§ 41-298. Jurisdiction — Construction of provisions.

1. The provisions of this chapter shall not be construed to affect or repeal any ordinance of any municipality relating to fire prevention or the control of arson or fraud, but the jurisdiction of the state fire marshal, the director, department of insurance, and the director, Idaho state police, in such municipality is to be concurrent with that of the municipal and county authorities.
2. With the exception of section 41-291(7), Idaho Code, all other provisions of this chapter shall not be construed to impair any existing statutory or common law rights or powers.

§ 41-301. “Stock” insurer defined.

For the purposes of this code a “stock” insurer is an incorporated insurer with its capital divided into shares and owned by its stockholders.

§ 41-302. “Mutual” insurer defined.

A “mutual” insurer is an incorporated insurer without capital stock and the governing body of which is elected by its policy holders. This definition shall not be deemed to exclude as “mutual” insurers certain foreign insurers found by the director to be organized on the mutual plan under the laws of their states of domicile, but having temporary share capital or providing for election of the insurer’s governing body on a reasonable basis by policy holders and others.

§ 41-302A. “Deposit guarantee” corporation defined.

A deposit guarantee corporation is an incorporated insurer without capital stock, the members of which are policy holders and the governing body of which is elected by its members.

§ 41-303. “Reciprocal” insurer defined.

A “reciprocal” insurer is as defined in section 41-2902[, Idaho Code].

§ 41-304. “Charter” defined.

“Charter” means articles of incorporation, articles of agreement, articles of association or other basic constituent document of a corporation, or the power of attorney of a reciprocal insurer.

§ 41-305. Certificate of authority required.

1. No person shall act as an insurer and no insurer or its agents, attorneys, subscribers, or representatives shall directly or indirectly transact insurance in this state except as authorized by a subsisting certificate of authority issued to the insurer by the director, except as to such transactions as are expressly otherwise provided for in this code.
2. No insurer shall from offices or by personnel or facilities located in this state solicit insurance applications or otherwise transact insurance in another state or country unless it holds a subsisting certificate of authority issued to it by the director authorizing it to transact the same kind or kinds of insurance in this state.

§ 41-306. Exceptions to certificate of authority requirement.

A certificate of authority and application therefor pursuant to section 41-319, Idaho Code, shall not be required of an insurer with respect to the following:

1. Investigation, settlement, or litigation of claims under its policies lawfully written in this state, or liquidation of assets and liabilities of the insurer (other than collection of new premiums), all as resulting from its former authorized operations in this state.
2. Transactions thereunder subsequent to issuance of a policy covering only subjects of insurance not resident, located or expressly to be performed in this state at time of issuance, and lawfully solicited, written and delivered outside this state.
3. Transactions pursuant to surplus lines coverages lawfully written under chapter 12, title 41, Idaho Code.
4. Reinsurance, when transacted by an insurer duly authorized by its state of domicile to transact the kind of insurance involved.
5. The continuation and servicing of life insurance or disability insurance policies or annuity contracts remaining in force as to residents of this state if the insurer has withdrawn from the state and is not transacting new insurance therein.
6. A foreign insurer licensed and authorized to sell individual or group accident and sickness insurance in another state as defined pursuant to section 41-306A, Idaho Code, and the insurer obtains a certificate of authority pursuant to that section.

§ 41-306A. Interstate insurance sales.

1. A foreign insurer subject to the jurisdiction of another state’s insurance department or insurance commissioner and licensed and authorized to transact health or disability insurance in its state of domicile may offer and sell an individual or group accident and sickness insurance policy as defined in section 41-516, Idaho Code, in Idaho as long as that individual or group accident and sickness policy provides the mandatory coverages this title requires for insurers.
2. The director may issue a certificate of authority to a foreign insurer to sell individual or group accident and sickness insurance policies in this state as long as that insurer is licensed in good standing in another state to sell individual or group accident and sickness insurance, remains licensed in good standing in that state to sell individual or group accident and sickness insurance and complies with the provisions of subsection (3) of this section. If an insurer is no longer licensed in good standing to sell individual or group accident and sickness insurance by its domiciled state, it shall be ineligible to do business in this state and its certificate of authority shall terminate immediately unless it obtains an independent certificate of authority in this state pursuant to chapter 3, title 41, Idaho Code, and complies with the provisions of this title.
3. In order for a foreign insurer to offer and sell individual or group accident and sickness insurance policies to residents of this state, the foreign insurer agrees that any dispute regarding its policies, benefits, contracts or coverages purchased by Idaho residents shall be governed by Idaho law, shall be either litigated in Idaho or have an alternative dispute resolution conducted in Idaho and shall appoint the director as its agent for service of process pursuant to section 41-333, Idaho Code. The foreign insurer submits to the jurisdiction of the department of insurance for all purposes under this title and is subject to all provisions of this title and rules promulgated thereunder applicable to insurers transacting accident and sickness insurance in Idaho. The foreign insurer must pay all fees and assessments provided by law under this title. The department of insurance may ensure that the forms used by a foreign insurer are appropriate and not misleading. Agents used by such foreign insurers are required to be licensed in Idaho.
4. Insurers selling policies in Idaho pursuant to this section shall comply with the provisions of section 41-402, Idaho Code, and remit the tax as provided in that section. Insurers selling policies in Idaho pursuant to this section shall be required to participate in the high risk reinsurance pool pursuant to chapter 55, title 41, Idaho Code.
5. The department of insurance shall promulgate, adopt and enforce such rules and such methods of administration as may be necessary or proper to carry out the provisions of this section.
6. The department of insurance is authorized to enter into compacts with other states for purposes of this section.

§ 41-307. Authorization for investment purposes only.

A foreign insurer may make investments in this state without certificate of authority as provided by section 30-21-502, Idaho Code. Such an insurer shall not be subject to any other provision of this code.

§ 41-308. General eligibility for certificate of authority.

To qualify for and hold authority to transact insurance in this state an insurer must be otherwise in compliance with this code and with its charter powers, and must be an incorporated stock insurer, or an incorporated mutual insurer, or a reciprocal insurer, of the same general type as may be formed as a domestic insurer under this code; except that:

1. No insurer shall be authorized to transact insurance in this state which does not maintain reserves as required by chapter 6 (assets and liabilities) of this code [chapter 6, title 41, Idaho Code,] applicable to the kind or kinds of insurance transacted by such insurer, wherever transacted in the United States.
2. Before granting authority to an insurer to transact insurance in this state, the director shall take into consideration the length of time the insurer has been transacting insurance; the net profit or loss experienced over the previous five (5) years; or any other factor which for good reason he believes could make the admittance of the insurer not in the best interest of the insurance-buying public.
3. The director shall not grant or continue authority to transact insurance in this state as to any insurer the management of which is found by him to be untrustworthy, or so lacking in insurance experience as to make the proposed operation hazardous to the insurance-buying public; or which he has good reason to believe is affiliated directly or indirectly through ownership, control, reinsurance transactions or other insurance or business relations, with any person or persons whose business operations are or have been marked, to the detriment of policyholders or stockholders or investors or creditors or of the public, by manipulation or dissipation of assets, or manipulation of accounts, or of reinsurance, or by similar injurious actions.

§ 41-309. Government-owned insurers not to be authorized.

No insurer the voting control or ownership of which is held in whole or substantial part by any government or governmental agency, or which is operated for or by any such government or agency, other than the Idaho state insurance fund, shall be authorized to transact insurance in this state. Membership in a mutual insurer, or subscribership in a reciprocal insurer, or ownership of stock of an insurer by the alien property custodian or similar official of the United States, or supervision of an insurer by public insurance supervisory authority shall not be deemed to be an ownership, control, or operation of the insurer for the purposes of this section.

§ 41-310. Payment of back taxes.

1. In addition to other applicable requirements therefor, no insurer formerly an authorized insurer in this state and again seeking admission to this state as an authorized insurer shall be so authorized unless the insurer, as part of its application for such authority, includes a written statement duly sworn to by at least two (2) of its executive officers of all premiums received by the insurer with respect to insurance on subjects of insurance resident, located, or to be performed in this state, subsequent to its previous withdrawal for any cause from this state, and pays to the state premium tax thereon at the same rate and in the same amount as the insurer would have paid on such premiums had it continued to be an authorized insurer in this state during the period interim its withdrawal and its re-application for authority.
2. Any insurer not theretofore authorized in this state which, within three (3) years prior to its application for authority to transact insurance in Idaho has transacted insurance in this state in violation of the laws of Idaho, shall not be granted such authority unless it is otherwise fully qualified therefor, files with the director a written statement sworn to by two (2) of its executive officers of all premiums received by it during such three (3) years with respect to insurance on subjects resident, located or to be performed in Idaho, and pays to the director as an additional fee for the filing of its application for certificate of authority, an amount of money equal to the premium tax which it would have paid to this state with respect to such premiums if it had been an authorized insurer in this state throughout such period.

§ 41-311. Name of insurer.

1. No insurer shall be formed, authorized or otherwise allowed to transact insurance in this state which has or uses a name or principal identifying name factor which is the same as or deceptively similar to that of another insurer earlier authorized or allowed to transact insurance in this state.
2. No life insurer shall be authorized or otherwise allowed to transact insurance in this state which has or uses a name deceptively similar to that of another insurer authorized or otherwise allowed to transact insurance in this state within the preceding ten (10) years if life insurance policies originally issued by such other insurer are still outstanding in this state.
3. No insurer shall hereafter be formed, newly authorized or otherwise allowed to transact insurance in this state which has or uses a name the same as or deceptively similar to the name of any foreign insurer doing business elsewhere than in this state if such foreign insurer has within the last preceding twelve (12) months signified its intention to secure incorporation in this state under such name, or do business as a foreign insurer in this state under such name by filing notice of such intention with the director, unless the written consent to the use of such name or deceptively similar name has been given by such foreign insurer.
4. No insurer shall be authorized or otherwise allowed to transact insurance in this state which has or uses a name which tends to deceive or mislead as to the type of organization of the insurer.
5. In case of conflict of names hereafter between two (2) insurers, or a conflict otherwise prohibited under this section, the director may permit, or shall require as a condition to the issuance of an original certificate of authority or other approval to transact insurance in this state to an applicant insurer, the insurer to use in this state such supplementation or modification of its name or such business name as may reasonably be necessary to avoid the conflict. No such name, supplementation or modification shall contain the principal identifying factor of the name of any other insurer already authorized or otherwise allowed to transact insurance in this state.

§ 41-312. Combinations of insuring powers — One insurer.

An insurer which otherwise qualifies therefor may be authorized to transact any one (1) kind or combination of kinds of insurance as defined in chapter 5 of this code [chapter 5, title 41, Idaho Code], except:

1. A life insurer may grant annuities and may be authorized to transact in addition only disability insurance; except, that the commissioner shall, if the insurer otherwise qualifies therefor, continue so to authorize any life insurer which immediately prior to the effective date of this code was lawfully authorized to transact in this state a kind or kinds of insurance in addition to life, and disability, insurances and annuity business.
2. A reciprocal insurer shall not transact life insurance.
3. A title insurer shall be a stock insurer, and shall not transact any other kind of insurance. This provision shall not prohibit the ceding of reinsurance by a title insurer to insurers other than mutual or reciprocal insurers.

§ 41-313. Capital funds required — Foreign insurers and new domestic insurers.

1. To qualify for and maintain authority to transact any one (1) kind of insurance (as defined in chapter 5[, title 41, Idaho Code]) or combination of kinds of insurance as shown below, a foreign insurer, or a domestic insurer shall possess and thereafter maintain unimpaired paid-up capital stock (if a stock insurer) or unimpaired basic surplus (if a mutual insurer or reciprocal insurer), and shall possess and thereafter maintain additional funds in surplus as follows:
2. An insurer holding a valid certificate of authority to transact insurance in this state shall comply with the paid-up capital stock or basic surplus and additional surplus requirements set forth in subsection (1) of this section. The director shall not grant such an insurer authority to transact any other or additional kinds of insurance unless it then fully complies with the requirements as to paid-up capital stock and additional surplus (if a stock insurer) or basic surplus and additional surplus (if a mutual or foreign reciprocal insurer) as applied to all the kinds of insurance which it then proposes to transact.
3. Capital and surplus requirements are based upon all the kinds of insurance transacted by the insurer in any and all areas in which it operates or proposes to operate, whether or not only a portion of such kinds are to be transacted in this state.
4. An insurance company holding a valid certificate of authority to transact insurance in this state immediately prior to January 1, 1995, shall have a period of three (3) years from and after that date within which to comply with the increase in capital and surplus requirements.

Life ...............................

$1,000,000

$1,000,000

Disability ...............................

1,000,000

1,000,000

Life and disability ...............................

1,000,000

1,000,000

Property ...............................

1,000,000

1,000,000

General casualty ...............................

1,000,000

1,000,000

Marine and transportation ...............................

1,000,000

1,000,000

Vehicle ...............................

1,000,000

1,000,000

Surety ...............................

1,000,000

1,000,000

Any two of the following

kinds of insurance:

Property, marine and transportation, general

casualty, vehicle, surety,

disability ...............................

1,000,000

1,000,000

Title ...............................

500,000

500,000

Multiple lines (all insurance

except life and

title insurance) ...............................

1,000,000

1,000,000

Mortgage guaranty insurance ...............................

1,500,000

1,500,000

§ 41-313A. Domestic reciprocal insurers with fewer than seven subscribers.

Domestic reciprocal insurers with fewer than seven (7) subscribers which insure only worker’s compensation risks and which only issue fully assessable policies are required, in lieu of the paid-up capital stock or basic surplus and additional surplus requirements of section 41-313, Idaho Code, to meet the security for payment of compensation standards set forth in section 72-301, Idaho Code; provided however, the securities required pursuant to this section shall be deposited with the director of the department of insurance as opposed to the industrial commission; provided further, all other rules, regulations or statutory requirements applicable to domestic reciprocal insurers administered by the director of the department of insurance remain applicable to reciprocal insurers meeting the requirements of this section.

§ 41-314. Capital funds required

Old domestic insurers. [Repealed.]

§ 41-315. Permissible insuring combinations without additional capital funds.

1. A life insurer may also grant annuities without additional capital or additional surplus.
2. A disability insurer may also issue insurance against congenital defects, as defined in section 41-506(1)( l )[, Idaho Code], without additional capital or additional surplus.
3. A casualty insurer may be authorized to transact also disability insurance without additional capital or additional surplus.
4. A property insurer may without additional capital or additional surplus include such amount and kind of insurance against legal liability or injury, damage, or loss to the person or property of others, and for medical, hospital, and surgical expense related to such injury, as the director deems to be reasonably incidental to insurance of real property against fire and other perils under policies covering farm properties, or residential properties designated for occupancy by not more than four (4) families, with or without incidental office, professional, private school or studio occupancy by an insured whether or not the premium or rate charged for certain perils so covered is specified in the policy. Any provision of section 41-509[, Idaho Code] (limit of risk) to the contrary notwithstanding, no insurer authorized as to property insurance only shall pursuant to this subsection retain risk as to any one (1) subject of insurance as to hazards other than property insurance hazards, in an amount exceeding five per cent (5%) of its surplus to policyholders.

§ 41-316. Deposit — Foreign or alien insurers.

1. This section shall apply as to all foreign and alien insurers.
2. The director shall not authorize any foreign or alien insurer to transact insurance in this state unless it makes and thereafter maintains in trust in this state through the director for the protection of all its policyholders or of all its policyholders and creditors, a deposit of cash or securities eligible for deposit under section 41-803, Idaho Code, in the amount of one million dollars ($1,000,000), except that:
   1. As to foreign insurers, except foreign title insurers, in lieu of such Idaho deposit, the director shall accept the certificate in proper form of the public official having supervision over insurers in the insurer’s state of domicile that:
      1. A like deposit by such insurer is being maintained in public custody or control for the protection generally of the insurer’s policyholders or its policyholders and creditors; and
      2. The insurer is a member in good standing of such state’s insurance guaranty association or other legal entity created for the same purpose; or if a life or health insurer, the insurer is a member in good standing of such state’s insurance guaranty association or other legal entity created for the same purpose, and such guaranty association does and shall provide protection for its own state’s residents.
   2. As to foreign title insurers, in lieu of such Idaho deposit, the director shall accept the certificate or certificates in proper form from the public official or officials having supervision over title insurers in any other state or states to the effect that a like deposit or total deposits by such insurer, in an equal or greater amount than required in this section, are being maintained in public custody or control for the protection generally of the insurer’s policyholders or its policyholders and creditors.
   3. As to alien insurers, in lieu of such deposit or part thereof in this state, the director shall accept evidence satisfactory to him that the insurer maintains within the United States by way of trust deposits with public depositaries, or in trust institutions acceptable to the director, assets available for discharge of its United States insurance obligations, which assets shall be in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with a surplus equal to the larger of the following sums:
      1. The largest deposit required by this code to be made by a foreign insurer transacting like kinds of insurance; or
      2. One million dollars ($1,000,000). Such surplus shall for all purposes under this code be deemed to be the “capital” or “surplus” of the insurer.
3. Deposits of foreign or alien insurers in another state shall be in cash and/or securities of substantially as high quality as those eligible for deposit in this state under section 41-803, Idaho Code.
4. All such deposits in this state are subject to the applicable provisions of chapter 8 (administration of deposits), title 41, Idaho Code, except that the release and return of deposits brought about by changes to section 41-316(2), Idaho Code, effective July 1, 1987, shall not require a hearing thereon as required under section 41-812(2), Idaho Code.
5. Any foreign or alien insurer which requires that its agents maintain a separate trust account for transactions involving that insurer shall make and thereafter maintain in trust in this state, through the director, for the protection of all its policyholders and agents, a deposit of cash or securities eligible for deposit under section 41-803, Idaho Code, in the amount of twenty percent (20%) of its gross written premiums, upon which such insurer is subject to the premium tax of this state under section 41-402, Idaho Code. (6) A foreign or alien insurer holding a valid certificate of authority to transact insurance in this state immediately prior to January 1, 1995, shall have a period of two (2) years from and after that date within which to comply with any increase in deposit requirements.

§ 41-317. Special deposit

Workmen’s compensation insurers. [Repealed.]

§ 41-318. Cooperation with the department of health and welfare.

1. A health insurer that provides disability insurance as defined in section 41-503, Idaho Code, including self-insured plans, group health plans as defined in section 607(1) of the employee retirement income security act of 1974, service benefit plans, managed care organizations, pharmacy benefit managers or other parties that are by statute, contract or agreement legally responsible for payment of a claim for a health care item or service with respect to medical assistance programs under chapter 2, title 56, Idaho Code, shall, as a condition of doing business in the state of Idaho, cooperate with the Idaho department of health and welfare by doing the following:
   1. Provide, with respect to an individual who is eligible for or who is or has been provided medical assistance under chapter 2, title 56, Idaho Code, within sixty (60) days of a request of the department, information to determine the period the individual or the individual’s spouse or dependents are, or have been, covered by the insurer and the nature of that coverage. The information shall include the name and address of the insurer and the identifying number of the health care insurance plan. The format of the information provided shall include the data elements, medium and frequency of reporting, any costs of the insurer to be reimbursed and procedures that will be followed when a data match is found;
   2. Accept the department’s right of recovery on behalf of the state of Idaho, and the assignment to the department of any right of an individual or other entity to payment from the party for an item or service for which payment has been made under chapter 2, title 56, Idaho Code;
   3. Respond to any inquiry by the department regarding a claim for payment for any health care item or service submitted not later than three (3) years after the date of the provision of the health care item or service; and
   4. Agree not to deny a claim submitted by the department solely on the basis of the date of submission of the claim, the type or format of the claim form, or a failure to present proper documentation at the point-of-sale that is the basis of the claim, if:
      1. The claim is submitted by the department within the three (3) year period beginning on the date on which the item or service was furnished; and
      2. Any action by the department to enforce its rights with respect to the claim is commenced within six (6) years after the department’s submission of the claim.
2. Failure to cooperate with the department as set forth in subsection (1) of this section shall subject the insurer to suspension or revocation of its certificate of authority pursuant to section 41-326, Idaho Code.

§ 41-319. Application for certificate of authority.

To apply for an original certificate of authority an insurer shall file with the director its application therefor, accompanied by the applicable fees set forth by rule pursuant to section 41-401, Idaho Code, showing its name, location of its home office or principal office in the United States (if an alien insurer), the kinds of insurance to be transacted, date of organization or incorporation, form of organization, state or country of domicile, and such additional information as the director may reasonably require, together with the following documents, as applicable:

1. If a foreign corporation, one (1) copy (photostatic copy or similar form of reproduction) of its corporate charter, articles of incorporation or other charter documents, with all amendments thereto, currently certified by the public official with whom the originals are on file in the state or country of domicile. If a domestic corporation, three (3) copies pursuant to section 41-2804, Idaho Code.
2. If a foreign corporation, one (1) copy (photostatic copy or similar form of reproduction) of its bylaws as amended, certified by the insurer’s corporate secretary. If a domestic corporation, three (3) copies (photostatic copies or similar form of reproduction) of its bylaws as amended, certified by the insurer’s corporate secretary.
3. If a reciprocal insurer, a copy of the power of attorney of its attorney in fact, and a copy of its subscribers’ agreement, if any, both certified by the attorney in fact; and if a domestic reciprocal insurer, the declaration provided for in section 41-2908, Idaho Code.
4. A complete copy of its financial statement as of not earlier than the December 31 next preceding in form as customarily used in the United States by like insurers, sworn to by at least two (2) executive officers of the insurer, or certified by the public insurance supervisory official of the insurer’s state of domicile or of entry into the United States.
5. Copy of report of last examination, if any, made of the insurer within not more than three (3) years next preceding, certified by the public insurance supervisory official of the insurer’s state of domicile or of entry into the United States; or, in the case of newly formed insurers, copy of the report of the “qualifying” examination of the insurer, similarly certified. Provided, however, that if the law of the applicant’s state of domicile requires that examinations shall be completed in a period of more than three (3) years or does not specify any period of time for examinations, then the applicant shall provide a copy of a report within not more than the five (5) years next preceding.
6. Appointment of the director pursuant to section 41-333, Idaho Code, as its attorney to receive service of legal process.
7. If a foreign insurer, a certificate of the public insurance supervisory official of its state or country of domicile showing that it is authorized to transact in such state or country the kind or kinds of insurance proposed to be transacted in this state.
8. If an alien insurer, a copy of the appointment and authority of its United States manager, certified by its officer having custody of its records.
9. If a foreign insurer, certificate as to deposit if to be tendered pursuant to section 41-316, Idaho Code. (10) If a life or disability insurer, one (1) copy of the insurer’s rate book and of each form of policy proposed to be issued in this state.

§ 41-320. Consideration of application.

An application for a certificate of authority shall be examined by the director, and if he finds the application to be complete and that the documents included therewith are otherwise in proper order, he shall forward the applicant insurer’s articles of incorporation and by-laws, if any, or copy of the power of attorney if a reciprocal insurer, and the insurer’s appointment of the director as process agent to the attorney general for examination. The attorney general shall examine the documents, and if found by him to be in accordance with the requirements of this code and not inconsistent with the constitution of this state he shall so certify in an opinion to the director.

§ 41-321. Filing of articles of incorporation. [Repealed.]

§ 41-322. Issuance or refusal of certificate of authority.

1. If upon completion of its application the director finds, from the application, the attorney general’s opinion referred to in section 41-320[, Idaho Code], and such other investigation and information as he may make or acquire, that the insurer is fully qualified for and entitled thereto under this code, he shall issue to the insurer a proper certificate of authority; if he does not so find, the director shall issue his order refusing such authority.
2. The director and attorney general shall take all necessary action therefor as specified in section 41-320[, Idaho Code,] and this section, and shall either issue or refuse to issue a certificate of authority within a reasonable time after the completion of the application for such authority.
3. The certificate of authority, if issued, shall specify the kind or kinds of insurance the insurer is authorized to transact in this state. At the insurer’s request, the director may issue authority limited to particular types of insurance or insurance coverages within the scope of a kind of insurance as defined in chapter 5 of this code [chapter 5, title 41, Idaho Code].

§ 41-322A. Certificates of authority for deposit guarantee corporations.

Upon the application of a deposit guarantee corporation, the director may issue a certificate of authority to a corporation authorized to issue share and deposit insurance contracts upon such terms and conditions as the director may prescribe by rule or regulation promulgated in accordance with section 41-211, Idaho Code, and chapter 52, title 67, Idaho Code.

§ 41-323. What certificate evidences — Ownership of certificate.

1. An insurer’s subsisting certificate of authority is evidence of its authority to transact in this state the kind or kinds of insurance specified therein, either as direct insurer or as reinsurer or as both.
2. Although issued to the insurer the certificate of authority is at all times the property of the state of Idaho. Upon any expiration, suspension, or termination thereof the insurer shall promptly deliver the certificate of authority to the director.

§ 41-324. Continuance, expiration, or reinstatement of certificate of authority.

1. A certificate of authority shall continue in force as long as the insurer is entitled thereto under this code and until suspended or revoked by the director, or terminated at the request of the insurer; subject, however, to continuance of the certificate by the insurer each year by:
   1. Payment prior to March 1 of the continuation fee as required by regulation of the department of insurance; and
   2. Due filing by the insurer of its annual statement for the calendar year preceding as required under section 41-335, Idaho Code; and
   3. Payment by the insurer of premium taxes with respect to the preceding calendar year as required by sections 41-402 and 41-403, Idaho Code.
2. If not so continued by the insurer, its certificate of authority shall expire as at midnight on the March 31 next following such failure of the insurer to continue it in force. The director shall promptly notify the insurer of the occurrence of any failure resulting in impending expiration of its certificate of authority.
3. The director may, in his discretion, upon the insurer’s request made within three (3) months after expiration, reinstate a certificate of authority which the insurer has inadvertently permitted to expire, after the insurer has fully cured all its failures which resulted in the expiration, and upon payment by the insurer of the fee for reinstatement specified in section 41-401, Idaho Code (fee schedule). Otherwise the insurer shall be granted another certificate of authority only after filing application therefor and meeting all other requirements as for an original certificate of authority in this state.

§ 41-325. Amendment of certificate of authority.

The director may at any time amend an insurer’s certificate of authority to accord with changes in the insurer’s charter or insuring powers.

§ 41-326. Suspension or revocation of certificate of authority — Mandatory grounds.

1. The director shall refuse to continue, or shall suspend or revoke, an insurer’s certificate of authority:
   1. If such action is required by any provision of this code; or
   2. If a foreign insurer, it no longer meets the requirements for the authority, on account of deficiency of assets or otherwise; or if a domestic insurer, it has failed to cure an impairment of capital or surplus within the time allowed therefor by the director under this code; or
   3. If the insurer knowingly exceeds its charter powers or powers granted under its certificate of authority; or
   4. If the insurer’s certificate of authority to transact insurance therein is suspended or revoked by its state of domicile, or state of entry into the United States if an alien insurer.
2. Except in cases of insolvency or impairment of required capital or surplus, or suspension or revocation by another state as referred to in subdivision (d) above, the director shall so refuse, suspend, or revoke the certificate of authority only after a hearing granted to the insurer thereon, unless the insurer waives such hearing in writing.

§ 41-327. Administrative penalty — Suspension or revocation of certificate of authority — Discretionary and special grounds.

1. The director may, in his discretion, impose an administrative penalty not to exceed five thousand dollars ($5,000) for deposit in the general fund of the state of Idaho, or refuse to continue or suspend or revoke an insurer’s certificate of authority if he finds after a hearing thereon that the insurer has violated or failed to comply with any lawful order of the director, or any provision of this code other than those for which suspension or revocation is mandatory.
2. The director shall suspend or revoke an insurer’s certificate of authority on any of the following grounds if he finds after a hearing thereon that the insurer:
   1. Is in unsound condition, or in such condition or using such methods and practices in the conduct of its business as to render its further transaction of insurance in this state hazardous or injurious to its policyholders or to the public.
   2. Has failed, after written request therefor by the director, to remove or discharge an officer or director who has been convicted of any crime involving fraud, dishonesty, or that is otherwise deemed relevant in accordance with section 67-9411(1), Idaho Code.
   3. With such frequency as to indicate its general business practice in this state, has without just cause refused to pay claims arising under coverages provided by its policies, whether the claim is in favor of an insured or is in favor of a third person with respect to the liability of an insured to such third person, or, with like frequency, without just cause compels insureds or claimants to accept less than the amount due them or to employ attorneys or to bring suit against the insurer or such an insured to obtain full payment or settlement of such claims.
   4. Is affiliated with and under the same general management, or interlocking directorate, or ownership as another insurer which transacts direct insurance in this state without having a certificate of authority therefor, except as permitted under this code.
   5. Refuses to be examined, or if its directors, officers, employees, or representatives refuse to submit to examination relative to its affairs, or to produce its accounts, records, and files for examination by the director when required, or refuses to perform any legal obligation relative to the examination.
   6. Has failed to pay any final judgment rendered against it in this state upon any policy, bond, recognizance, or undertaking issued or guaranteed by it within thirty (30) days after the judgment became final, or within thirty (30) days after time for taking an appeal has expired, or within thirty (30) days after dismissal of an appeal before final determination, whichever date is latest.
3. The director may, in his discretion and without advance notice or a hearing thereon, immediately suspend the certificate of authority of any insurer as to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings have been commenced in any state by the public insurance supervisory official of such state.

§ 41-328. Order and notice of suspension, revocation or refusal — Effect upon agents’ authority.

1. All suspensions or revocations of, or refusals to continue, an insurer’s certificate of authority shall be by the director’s order given to the insurer as provided by section 41-212[, Idaho Code].
2. Upon suspending or revoking or refusing to continue the insurer’s certificate of authority the director shall forthwith give notice thereof to the insurer’s agents in this state of record in the department, and shall likewise suspend or revoke the authority of such agents to represent the insurer.
3. In his discretion the director may likewise publish notice of such suspension, revocation or refusal in one or more newspapers of general circulation in this state.

§ 41-329. Duration of suspension — Insurer’s obligations during suspension period — Reinstatement.

1. Suspension of an insurer’s certificate of authority shall be for such period as the director specifies in the order of suspension, but not to exceed one (1) year. During the suspension the director may rescind or shorten the suspension by his further order.
2. During the suspension period the insurer shall not solicit or write any new business in this state, but shall file its annual statement, pay fees, licenses, and taxes as required under this code, and may service its business already in force in this state, as if the certificate of authority had continued in full force.
3. Upon expiration of the suspension period, if within such period the certificate of authority has not terminated, the insurer’s certificate of authority shall automatically reinstate unless the director finds that the causes of the suspension have not terminated, or that the insurer is otherwise not in compliance with the requirements of this code, and of which the director shall give the insurer notice not less than thirty (30) days in advance of the expiration of the suspension period after which time the director may issue a new order of suspension. If not reinstated or if a new order of suspension is not issued, the certificate of authority shall be deemed to have terminated as of the end of the suspension period.
4. Upon reinstatement of the insurer’s certificate of authority, the authority of its agents in this state to represent the insurer shall likewise reinstate. The director shall promptly notify the insurer and its agents in this state of record in the department, of such reinstatement. If pursuant to section 41-328(3), Idaho Code, the director has published notice of such suspension he shall in like manner publish notice of the reinstatement.

§ 41-330. Impaired insurers — Notice to agents — Penalty.

1. Upon suspension, revocation or refusal to continue the certificate of authority of an insurer on account of deficiency of assets (if a foreign insurer) or failure to cure an impairment of the capital stock (if a stock insurer) or surplus (if a mutual or reciprocal) of a domestic insurer, as provided under section 41-326(1)(b)[, Idaho Code], every officer and director of the insurer must, either separately or jointly with one or more of the others and within four (4) days after notice of such suspension, revocation or refusal was given to the insurer by the director, notify by any available means every person authorized by the insurer, as of immediately prior to such suspension, revocation or refusal, to write business for the insurer in Idaho, immediately to cease such writing; and each such person so notified shall immediately cease to write any further business for the insurer in Idaho.
2. Each individual made responsible for such notification under the foregoing subsection, who fails so to notify, and every person so authorized who, after being so notified or otherwise being informed as to such impairment or suspension, revocation, or refusal, solicits or writes further business for the insurer, is guilty of a felony and upon conviction shall be punished by a fine of not exceeding ten thousand dollars ($10,000) or by imprisonment in the Idaho state penitentiary for a term of not exceeding ten (10) years, or by both such fine and imprisonment.
3. This section does not apply to any person or persons, whomsoever, who has been appointed as and is acting as rehabilitator or receiver of the insurer in judicial proceedings in a court of the United States or of the state of Idaho.

§ 41-331. Impaired insurers — Liability of officers.

The president and each director of a stock insurer who, after knowing that the insurer’s capital is impaired, permits or assents in the writing of new business by the insurer in this state during the existence of such impairment, shall, together with their respective estates, be severally and jointly liable for the amount of any loss or losses which may be incurred by the insured under any such new insurance.

§ 41-332. Foreign insurers exempt from corporation laws governing admission of foreign corporations.

A foreign insurer authorized to transact insurance in this state and fully complying with this code shall be exempt from complying with the provisions of sections 30-21-501 through 30-21-512, Idaho Code.

§ 41-333. Director as process agent for foreign insurers and domestic reciprocal insurers.

1. Before the director shall issue to it a certificate of authority to transact insurance in this state each foreign and alien insurer and each domestic reciprocal insurer shall appoint the director and his successors in office, as its attorney to receive service of legal process issued against the insurer in this state. The appointment shall be made on a form as designated and furnished by the director. The appointment shall be irrevocable, shall bind the insurer and any successor in interest or to the assets or liabilities of the insurer, and shall remain in effect as long as there is in force any contract of the insurer in this state or any obligation of the insurer arising out of its transactions in this state.
2. Service of such process against a foreign or alien insurer shall be made only by service thereof upon the director, or his deputy, or other person in charge of his office during his absence.
3. At time of application for a certificate of authority the insurer shall file the appointment with the director, together with designation of the person to whom process against it served upon the director is to be forwarded. The insurer may change such designation by a new filing.

§ 41-334. Serving process — Time to plead.

1. Duplicate copies of legal process against an insurer for whom the director is attorney, shall be served upon him either by a person competent to serve a summons or by registered or certified mail. At the time of service the plaintiff shall pay to the director an appropriate fee not in excess of thirty dollars ($30.00) which fee shall be determined by rule and regulation.
2. The director shall forthwith send one (1) of the copies of the process, by registered or certified mail with return receipt requested, to the person designated for the purpose by the insurer in its most recent such designation filed with the director.
3. The director shall keep a record of the day of service upon him of all legal process. No proceedings shall be had against the insurer, and the insurer shall not be required to appear, plead, or answer until the expiration of thirty (30) days after the date of service upon the director.
4. Process served upon the director and copy thereof forwarded as in this section provided shall for all purposes constitute valid and binding service thereof upon the insurer.

§ 41-335. Annual statement.

1. Each authorized insurer shall annually on or before March 1, or within any extension of time therefor, not to exceed thirty (30) days, which the director for good cause may have granted, file with the director a full and true statement of its financial condition, transactions and affairs as of the preceding December 31. Unless otherwise required by the director, the statement is to be prepared in accordance with the national association of insurance commissioners’ (NAIC) annual statement instructions and the NAIC’s accounting practices and procedures manual, utilizing the version of the manual effective January 1, 2004, and any subsequent revisions that are adopted for use by the director by rule, administrative order or bulletin, and is to be submitted on the NAIC annual statement blank form, and any statement, form or other information relating to the compensation of any officer, director or employee will be deemed confidential. At the seasonable request of a domestic insurer the director shall furnish to the insurer the blank form of annual statement to be used by it. The statement shall be verified by the oath of the insurer’s president or vice president, and secretary or actuary as applicable, or if a reciprocal insurer, by the oath of the attorney in fact or its like officers if a corporation.
2. The statement of an alien insurer shall be verified by its United States manager or other officer duly authorized, and shall relate only to the insurer’s transactions and affairs in the United States unless the director requires otherwise. If the director requires a statement as to the insurer’s affairs throughout the world, the insurer shall file such statement with the director as soon as reasonably possible.
3. Any insurance company licensed to do business in this state which neglects to file or fails to file in the time prescribed by statute its annual statement or supplemental summary statement requested by the director shall be subject to a penalty of twenty-five dollars ($25.00) per day for each day in default. This penalty will be in addition to any administrative penalty which may be assessed pursuant to sections 41-327 and 41-324, Idaho Code.
4. Each domestic insurer authorized to do business in this state shall annually, on or before March 1 of each year, file with the NAIC its annual financial statement in a form prescribed by the director along with any additional filings prescribed by the director for the preceding year. The information filed with the NAIC shall be in the same format and scope as that required by this code. Any amendments or addenda to the annual statement shall also be filed with the NAIC.
5. At time of filing, the insurer shall pay to the director the fee for filing its statement as prescribed by rule of the department of insurance.

§ 41-336. Review of annual statement — Additional information.

1. As soon as reasonably possible after the insurer has filed its annual statement with him, the director shall review the same and require correction of such errors or omissions in the statement as appear from such review.
2. Any company transacting business in this state may be required by the director, when he considers such action to be necessary for the protection of policyholders, creditors, shareholders or claimants, to file a supplementary summary financial statement in a format prescribed by the director. Supplementary summary financial statements shall be due within sixty (60) days after notice is mailed to the company by the director requesting such statement. No company shall be required to file more than four (4) supplementary summary statements during any consecutive twelve (12) month period. The director may, at his discretion, require the annual statement be certified by an independent actuary deemed competent by the director or by an independent certified public accountant.
3. In addition to information called for and furnished in connection with its annual statement, an insurer shall promptly furnish to the director such other or further information with respect to any of its transactions or affairs as the director may from time to time request in writing.

§ 41-336A — 41-336D. Statistical reports — Disposition — Penalties — Fees. [Repealed.]

§ 41-337. Resident agent, countersignature law.

1. Except as provided in section 41-338, Idaho Code, no authorized insurer shall make, write, place or cause to be made, written or placed, any policy or contract of insurance or indemnity of any kind or character, or a general or floating policy covering risks on property located in Idaho, liability created by or accruing under the laws of this state, or undertakings to be performed in this state, except through its resident insurance agents licensed as provided in this code, who shall countersign or cause a facsimile of his signature to be placed on all policies or indemnity contracts so issued, and who shall keep a record of the same, containing the usual and customary information concerning the risk undertaken and the full premium paid or to be paid therefor, to the end that the state may receive the taxes required by law to be paid on premiums collected for insurance on property or undertakings located in this state. When two (2) or more insurers issue a single policy of insurance the policy may be countersigned on behalf of all insurers appearing thereon by a licensed agent, resident in this state, of any one such insurer.
2. The agent may grant a power of attorney in writing to an individual who is twenty-one (21) years or more of age authorizing such person to countersign or cause a facsimile of the agent’s signature to be placed on policies and indorsements in his name and behalf. The power of attorney shall be acknowledged by the agent under oath before a notary public and shall be kept on file in the agent’s office.

§ 41-338. Exceptions to resident agent, countersignature law.

1. Nothing in section 41-337, Idaho Code, shall be construed as preventing the free and unlimited right to negotiate wholly outside of this state contracts of insurance by licensed nonresident agents or brokers, provided the policies, endorsements or evidence of insurance covering properties or insurable interests in this state are countersigned by a resident agent of this state, in which event the countersigning agent shall receive a commission of not less than five per cent (5%) of the premium paid or one-third (1/3) of the commission paid to the licensed nonresident agent or broker, whichever is less; provided, however, the payment to the countersigning agent shall not exceed the sum of two hundred fifty dollars ($250) per policy, and when the countersigning commission to be paid is less than five dollars ($5.00), the countersigning agent may waive any commission due him.
2. Section 41-337, Idaho Code, shall not apply to the following contracts:
   1. Life insurance and annuities;
   2. Disability insurance;
   3. Title insurance; countersignature of title insurance policies is as provided in section 41-2702, Idaho Code;
   4. Policies covering property in transit while in the possession or custody of any common carrier, or the rolling stock or other property of any common carrier used and employed by it as a common carrier of freight or passengers, or both;
   5. Reinsurance or retrocessions made by or for authorized insurers;
   6. Contracts issued by domestic reciprocal insurers writing workmen’s [worker’s] compensation for employers commonly known as self-insurers; nor, with respect to countersignature, to policies issued by a reciprocal insurer not using agents compensated by commissions in the general solicitation of business;
   7. Bid bonds issued by a surety insurer in connection with any public or private contract; or
   8. Ocean marine insurance.
3. Notwithstanding section 41-337, Idaho Code, and the provisions of subsection (1) of this section, if the law of another state does not require the countersignature of a licensed agent who resides in that state for policies and contracts of insurance or indemnity made, written or placed in that state by a licensed agent who resides in the state of Idaho, the countersignature of a licensed agent who resides in the state of Idaho is not required for policies and contracts of insurance or indemnity made, written or placed in the state of Idaho by a licensed agent who resides in that other state.

§ 41-339. Affidavit of compliance with resident agent, countersignature law. [Repealed.]

§ 41-340. Retaliatory provision.

1. The purpose of this section is to aid in the protection of insurers formed under the laws of Idaho and transacting insurance in other states or countries against discriminatory or onerous requirements under the laws of such states or countries or the administration thereof.
2. When by or pursuant to the laws of any other state or foreign country or province any taxes in the aggregate, are or would be imposed upon Idaho insurers, or upon the agents or representatives of such insurers, which are in excess of such taxes in the aggregate, directly imposed upon similar insurers, or upon the agents or representatives of such insurers, of such other state or country under the statutes of this state, so long as such laws of such other state or country continue in force or are so applied, the same taxes in the aggregate, shall be imposed by the director upon the insurers, or upon the agents or representatives of such insurers, of such other state or country doing business or seeking to do business in Idaho. Any tax imposed by any city, county, or other political subdivision or agency of such other state or country on Idaho insurers or their agents or representatives shall be deemed to be imposed by such state or country within the meaning of this section.
3. When pursuant to the laws of a state, foreign country or province any obligation is or would be imposed upon Idaho insurers or their agents or representatives, in excess of obligations imposed upon similar insurers or their agents or representatives of another state or country, so long as the laws of the state or country imposing the obligation continue in force or are applied, the same obligation may be imposed by the director upon insurers or their agents or representatives of such other states or countries doing business or seeking to do business in Idaho. Any obligation imposed by any city, county, or other political subdivision or agency of another state or country on Idaho insurers or their agents or representatives shall be deemed to be imposed by the other state or country within the meaning of this section. For purposes of this section, the term “obligation” shall mean any license, fee, fine, penalty, deposit requirement or other obligation, prohibition or restriction.
4. This section shall not apply as to personal income taxes, nor as to ad valorem taxes on real or personal property nor as to special purpose obligations or assessments imposed by another state in connection with particular kinds of insurance; except that deductions, from premium taxes or other taxes otherwise payable, allowed on account of real estate or personal property taxes paid shall be taken into consideration by the director in determining the propriety and extent of retaliatory action under this section.
5. For the purposes of this section the domicile of an alien insurer, other than insurers formed under the laws of Canada, or a province thereof, shall be that state designated by the insurer in writing filed with the director at time of admission to this state or within six (6) months after the effective date of this code, whichever date is the later, and may be any one (1) of the following states:
   1. That in which the insurer was first authorized to transact insurance;
   2. That in which is located the insurer’s principal place of business in the United States;
   3. That in which is held the largest deposit of trusteed assets of the insurer for the protection of its policyholders in the United States. If the insurer makes no such designation its domicile shall be deemed to be that state in which is located its principal place of business in the United States.
6. The domicile of an insurer formed under the laws of Canada or a province thereof shall be as provided in section 41-108(1), Idaho Code.

§ 41-341. Operational standards between insurer, its parent corporation, subsidiary or affiliated person.

1. No insurer shall engage directly or indirectly in any transaction or agreement with its parent corporation, or with any subsidiary or affiliated person which shall result or tend to result in:
   1. Substitution through any method of any asset of the insurer with an asset or assets of inferior quality or lower fair market value; or
   2. Deception as to the true operating results of the insurer; or
   3. Deception as to the true financial condition of the insurer; or
   4. Allocation to the insurer of a proportion of the expense of combined facilities or operations which is unfair and unfavorable to the insurer; or
   5. Unfair, unnecessary or excessive charges against the insurer for services, or facilities, or supplies, or reinsurance; or
   6. Unfair and inadequate charges by the insurer for reinsurance, services, facilities, or supplies furnished by the insurer to others; or
   7. Payment by the insurer for services, facilities, supplies, or reinsurance not reasonably needed by the insurer.
2. In all transactions between the insurer and its parent corporation, or involving the insurer and any subsidiary or affiliated person, full recognition shall be given to the paramount duty and obligation of the insurer to protect the interests of policyholders, both existing and future.
3. For the purposes of this section a “subsidiary” is a person of which either the insurer and/or the parent corporation holds practical control, and an “affiliated person” is a person controlled by any combination of the insurer, the parent corporation, a subsidiary, or the principal stockholders or officers or directors of any of the foregoing.

§ 41-342. Redomestication as a domestic insurer — Conversion to foreign insurer.

1. Any insurer which is organized under the laws of any other state and is admitted to do business in this state for the purpose of writing insurance may become a domestic insurer by complying with all of the requirements of law relative to the organization and licensing of a domestic insurer of the same type and by designating its principal place of business at a place in Idaho in compliance with section 41-2839, Idaho Code. Such a domestic insurer shall be entitled to a certificate of redomestication and a certificate of authority to transact business in this state and shall have the same rights and obligations as other domestic insurers of this state.
2. Any domestic insurer may, upon the approval of the director, transfer its domicile to any other state in which it is admitted to transact the business of insurance. Upon such a transfer, the insurer shall cease to be a domestic insurer. If the insurer is otherwise qualified, the director shall admit the insurer to this state as a foreign insurer. The director shall approve any such proposed transfer unless he determines that such a transfer is not in the interest of the policyholders of the insurer in this state. After the director has approved the transfer, the director shall provide written notice to the secretary of state that the insurer has transferred its domicile to another state, stating the effective date of the transfer and the state to which the insurer has transferred its domicile. Upon receipt of the written notice from the director and the payment of the fee required in section 30-21-214, Idaho Code, the secretary of state shall file the notice and, on the effective date of the transfer, terminate the existence of the insurance company as a domestic corporation.
3. The certificate of authority, appointment of statutory agent and licenses, policy forms, rates, authorizations and other filings and approvals in existence at the time an insurer admitted to transact insurance in this state transfers its corporate domicile to this or any other state, continue in effect upon the transfer of corporate domicile. All rates and outstanding policies of any transferring insurer shall remain in full force and effect and policies need not be endorsed as to the new domicile unless so ordered by the director. Every transferring insurer shall either file new policy forms for use in this state with the director on or before the effective date of the transfer, or use existing policy forms in this state with appropriate endorsements as allowed by and under such conditions as may be approved by the director. Every transferring insurer shall notify the director of the proposed transfer and shall promptly file any resulting amendments to its corporate documents required to be filed with the director.

§ 41-343. Articles of redomestication.

1. Upon receiving approval under section 41-342, Idaho Code, articles of redomestication shall be executed in duplicate by an insurance corporation by its president or a vice president and by its secretary or an assistant secretary and verified by one (1) of the officers of the corporation and shall set forth:
   1. The date of approval of the director of the Idaho department of insurance of the redomestication; and
   2. The state in which the insurer was originally incorporated, the date the insurer was incorporated in that state, and the date the insurer was authorized to do business as an insurer in the state in which it was originally incorporated.
2. The insurer shall attach to the articles of redomestication:
   1. Articles of incorporation including such amendments as may be required to comply with the requirements of part 10, chapter 29, title 30, Idaho Code;
   2. A copy of the certificate of redomestication issued by the director of the Idaho department of insurance.
3. Duplicate originals of the articles of redomestication shall be delivered to the secretary of state. If the secretary of state finds that such articles conform to law, he shall, when all fees have been paid as prescribed in chapter 21, title 30, Idaho Code:
   1. Endorse on each of such duplicate originals the word “Filed,” and the month, day and year of the filing, together with the date from which the insurer has existed and operated as an insurer which shall be the date the insurer was originally incorporated in the state in which the insurer was originally incorporated;
   2. File one (1) of such duplicate originals in his office; and
   3. Issue a certificate of redomestication setting forth the date on which the articles of redomestication were filed and the date from which the insurer has existed and operated as an insurer which shall be the date the insurer was originally incorporated in the state in which the insurer was originally incorporated.
4. The certificate of redomestication, together with the duplicate original of the articles of redomestication affixed thereto by the secretary of state, shall be returned to the insurer or to its representative.

§ 41-344. Effective date of redomestication.

A redomestication under section 41-342, Idaho Code, shall become effective upon the issuance of a certificate of redomestication by the secretary of state, or such later date as may be set forth in the notice from the director; provided, however, that an insurer which has redomesticated in the state of Idaho pursuant to section 41-342, Idaho Code, shall be considered to be the same corporation as that corporation which existed under the laws of the state in which it was formerly domiciled and shall be considered as having been an operating insurer from the date that the corporation was authorized to do business as an insurer in its original state of incorporation.

§ 41-345. Report.

1. Every insurer domiciled in this state shall file a report with the director disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements unless such acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements have been submitted to the director for review, approval or information purposes pursuant to other provisions of the insurance code, laws, rules or other requirements.
2. The report required in subsection (1) of this section is due within fifteen (15) days after the end of the calendar month in which any of the foregoing transactions occur.
3. One (1) complete copy of the report, including any exhibits or other attachments filed as part thereof, shall be filed with the Idaho department of insurance.
4. All reports obtained by or disclosed to the director pursuant to sections 41-345 through 41-347, Idaho Code, shall be given confidential treatment and shall not be subject to subpoena and shall not be made public by the director, the national association of insurance commissioners, or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains unless the director, after giving the insurer who would be affected thereby, notice and an opportunity to be heard, determines that the interest of policyholders, shareholders or the public will be served by the publication thereof, in which event the director may publish all or any part thereof in such manner as he may deem appropriate.

§ 41-346. Acquisitions and dispositions of assets.

1. Materiality. No acquisitions or dispositions of assets need be reported pursuant to section 41-345, Idaho Code, if the acquisitions or dispositions are not material. For purposes of sections 41-345 through 41-347, Idaho Code, a material acquisition (or the aggregate of any series of related acquisitions during any thirty (30) day period) or disposition (or the aggregate of any series of related dispositions during any thirty (30) day period) is one that is nonrecurring and not in the ordinary course of business and involves more than five percent (5%) of the reporting insurer’s total admitted assets as reported in its most recent statutory statement filed with the insurance department of the insurer’s state of domicile.
2. Scope.
   1. Asset acquisitions subject to sections 41-345 through 41-347, Idaho Code, include every purchase, lease, exchange, merger, consolidation, succession or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for such purpose.
   2. Asset dispositions subject to sections 41-345 through 41-347, Idaho Code, include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment (whether for the benefit of creditors or otherwise), abandonment, destruction or other disposition.
3. Information to be reported.
   1. The following information is required to be disclosed in any report of a material acquisition or disposition of assets:
      1. Date of the transaction;
      2. Manner of acquisition or disposition;
      3. Description of the assets involved;
      4. Nature and amount of the consideration given or received;
      5. Purpose of, or reason for, the transaction;
      6. Manner by which the amount of consideration was determined;
      7. Gain or loss recognized or realized as a result of the transaction; and
      8. Name(s) of the person(s) from whom the assets were acquired or to whom they were disposed.
   2. Insurers are required to report material acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and such insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than one million dollars ($1,000,000) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurer’s capital and surplus.

§ 41-347. Nonrenewals, cancellations or revisions of ceded reinsurance agreements.

1. Materiality and scope. No nonrenewals, cancellations or revisions of ceded reinsurance agreements need be reported pursuant to section 41-345, Idaho Code, if the nonrenewals, cancellations or revisions are not material. For purposes of sections 41-345 through 41-347, Idaho Code, a material nonrenewal, cancellation or revision is one that affects:
   1. As respects property-casualty business, including accident and health business written by a property-casualty insurer:
      1. More than fifty percent (50%) of the insurer’s total ceded written premium; or
      2. More than fifty percent (50%) of the insurer’s total ceded indemnity and loss adjustment reserves.
   2. As respects life, annuity and accident and health business more than fifty percent (50%) of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurer’s most recent annual statement.
   3. As respects either property-casualty or life, annuity and accident and health business, either of the following events shall constitute a material revision which must be reported:
      1. An authorized reinsurer representing more than ten percent (10%) of a total cession is replaced by one (1) or more unauthorized reinsurers; or
      2. Previously established collateral requirements have been reduced or waived as respects one (1) or more unauthorized reinsurers representing collectively more than ten percent (10%) of a total cession.
2. No filing shall be required, however, if:
   1. As respects property-casualty business, including accident and health business written by a property-casualty insurer, the insurer’s total ceded written premium represents, on an annualized basis, less than ten percent (10%) of it [its] total written premium for direct and assumed business; or
   2. As respects life, annuity and accident and health business, the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent (10%) of the statutory reserve requirement prior to any cession.
3. Information to be reported.
   1. The following information is required to be disclosed in any report of a material nonrenewal, cancellation or revision of ceded reinsurance agreements:
      1. Effective date of the nonrenewal, cancellation or revision;
      2. The description of the transaction with an identification of the initiator thereof;
      3. Purpose of, or reason for, the transaction; and
      4. If applicable, the identity of the replacement reinsurers.

§ 41-348. Prohibited acts — Service providers.

1. It is unlawful for a person:
   1. Knowing that the payment is for the referral of a claimant to a service provider, either to accept payment from a service provider or, being a service provider, to pay another; or
   2. To provide or claim or represent to have provided services to a claimant, knowing the claimant was referred in violation of paragraph (a) of this subsection.
2. It is unlawful for a service provider to engage in a regular practice of waiving, rebating, giving, paying, or offering to waive, rebate, give or pay all or part of a claimant’s deductible or claim for casualty, disability insurance, worker’s compensation insurance, health insurance or property insurance.
3. As used in this section:
   1. “Health care services” means a service provided to a claimant for treatment of physical or mental illness or injury arising in whole or substantial part from trauma.
   2. “Service provider” means a person who directly or indirectly provides, advertises, or otherwise claims to provide services.
   3. “Services” means health care services, motor vehicle body or other motor vehicle repair and preparing, processing, presenting or negotiating an insurance claim against an insurance company.
4. Any person or service provider violating the provisions of this section shall be subject to the monetary civil penalties provided in section 41-327, Idaho Code, as if the person or service provider were an insurer.

§ 41-349. Pharmacy benefit managers.

1. As used in this section:
   1. “Maximum allowable cost” means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a generic drug.
   2. “Pharmacy benefit manager” means a person or entity doing business in this state that contracts with pharmacies on behalf of an insurer, third-party administrator, or managed care organization to administer prescription drug benefits to residents of this state.
2. A person may not perform, offer to perform, or advertise any pharmacy benefit management service in this state unless the person is registered as a pharmacy benefit manager with the department of insurance. A person may not utilize the services of another person as a pharmacy benefit manager if the person knows or has reason to know that the other person does not have a registration with the department. Such registration must occur annually no later than April 1 of each year and shall be on a form prescribed by the director. The department may utilize applicable sections of this title to administer registration as provided in this subsection.
3. A pharmacy benefit manager shall not prohibit a pharmacist or retail pharmacy from providing a covered person information on the amount of the cost share for a prescription drug and the clinical efficacy of a more affordable alternative drug if one is available, and a pharmacy benefit manager may not penalize a pharmacist or retail pharmacy for disclosing such information to a covered person or for selling to a covered person a more affordable alternative if one is available.
4. A pharmacy benefit manager using maximum allowable cost pricing may place a drug on a maximum allowable cost list if the pharmacy benefit manager does the following:
   1. Ensures that the drug:
      1. 1. Is listed as “A” or “B” rated in the most recent version of the United States food and drug administration’s approved drug products with therapeutic equivalence evaluations, also known as the “orange book”; or
      2. Is available for purchase by pharmacies in the state from national or regional wholesalers and is not obsolete;
   2. Provides to a network pharmacy, at the time a contract is entered into or renewed with the network pharmacy, the sources used to determine the maximum allowable cost pricing for the maximum allowable cost list specific to that provider;
   3. Reviews and updates maximum allowable cost price information at least once every seven (7) business days to reflect any modification of maximum allowable cost pricing;
   4. Establishes a process for eliminating products from the maximum allowable cost list or modifying maximum allowable cost prices in a timely manner to remain consistent with pricing changes and product availability in the marketplace;
   5. Establishes a process by which a network pharmacy, or a network pharmacy’s contracting agent, may appeal the reimbursement for a generic drug no later than thirty (30) days after such reimbursement is made; and
   6. Provides a process for each of its network pharmacies to readily access the maximum allowable cost list specific to that provider.
5. No pharmacy benefit manager may retroactively deny or reduce a claim for reimbursement of the cost of services after the claim has been adjudicated by the pharmacy benefit manager unless: (a) The adjudicated claim was submitted fraudulently or improperly; or

2. Has an “NR” or “NA” rating or a similar rating by a nationally recognized reference; and

(b) The pharmacy benefit manager’s payment on the adjudicated claim was incorrect because the pharmacy or pharmacist had already been paid for the services.

§ 41-401. Fees — Licenses — Miscellaneous charges.

1. The director shall collect, and persons so served shall pay to the director fees, licenses, and miscellaneous charges as provided for from time to time by rule promulgated by the director. The director may adjust fees, licenses and miscellaneous charges as necessary to allow the department to meet the appropriation as provided for by law.
2. Any rule setting fees, licenses and miscellaneous charges shall adhere to the Idaho administrative procedure act except that the effective date of such rule shall be July 1 of the calendar year of enactment or change. If the appropriation is not known or set by April 1, the director shall be authorized to use emergency rulemaking procedures to maintain an effective date of July 1.
3. Insurance Administrative Account:
   1. There is hereby created an account in the dedicated fund in the state treasury, to be designated the “Insurance Administrative Account” to provide for the expenses of the department of insurance as provided for by law.
   2. The insurance administrative account shall be effective December 31, 1984, and be in existence for a period of at least six (6) months prior to the dedicated account appropriation becoming effective and shall consist of the following:
      1. All moneys appropriated by the legislature.
      2. All fees, licenses and miscellaneous charges collected pursuant to this section.
   3. All moneys placed in the account shall be examined, audited and allowed in the manner now or hereafter provided by law.
   4. Pending use for purposes of the provisions of the laws of this state, moneys in the insurance administrative account shall be invested by the state treasurer in the same manner as provided under section 67-1210, Idaho Code, with respect to other surplus or idle moneys in the state treasury.
   5. At the beginning of each fiscal year, those moneys in the insurance administrative account which exceed the current year’s appropriation plus any residual encumbrances made against prior years’ appropriations by twenty-five percent (25%) or more shall be transferred to the general account [fund]. The balance in this account shall not be considered excessive until such a transfer is required pursuant to the provisions of this subsection.

§ 41-402. Premium tax.

1. Each authorized insurer, and each formerly authorized insurer with respect to insurance transacted while an authorized insurer, shall file with the director, on or before the dates in each year set forth in subsections (3) and (4) of this section, a statement (on forms as prescribed and furnished by the director) under oath, for the period set forth in subsections (3) and (4) of this section, and pay the director a tax at the rate set forth in subsection (2) of this section, on the following amounts:
   1. As to life insurers, the amount of all gross premiums received by the insurer on direct risks resident in this state, and also, if a domestic insurer, on direct risks resident in any other jurisdiction or jurisdictions in which the insurer is not licensed and upon which no premium tax is otherwise paid or payable, less returned coupons and dividends paid to or credited to policyholders.
   2. As to all insurers other than life insurers, the amount of gross direct premiums written on policies covering subjects of insurance resident, located or performed in this state, and also, if a domestic insurer, on such premiums in any other jurisdiction or jurisdictions in which the insurer is not licensed and upon which no premium tax is otherwise paid or payable, less returned premiums, premiums on policies not taken and dividends paid or credited to policyholders. As to title insurance, “gross premium” means the insurance risk portion of the amount charged for title insurance.
2. Subject to section 41-403, Idaho Code, as that section applies through calendar year 2009, the rate of tax shall be as follows:
   1. As to title insurance, the rate of tax shall be one and five-tenths percent (1.5%).
   2. As to all other kinds of insurance, the rate of tax shall be:
      1. For calendar year 2004 and before, two and seventy-five hundredths percent (2.75%);
      2. For calendar year 2005, two and five-tenths percent (2.5%);
      3. For calendar year 2006, two and three-tenths percent (2.3%);
      4. For calendar year 2007, two and one-tenth percent (2.1%);
      5. For calendar year 2008, one and nine-tenths percent (1.9%);
      6. For calendar year 2009, one and seven-tenths percent (1.7%); and
      7. For calendar year 2010 and thereafter, one and five-tenths percent (1.5%).
3. 1. Every insurer with a tax obligation under this section shall make prepayment of the tax obligations for the current calendar year’s business if the sum of the tax obligations for the preceding calendar year’s business is four hundred dollars ($400) or more. (3)(a) Every insurer with a tax obligation under this section shall make prepayment of the tax obligations for the current calendar year’s business if the sum of the tax obligations for the preceding calendar year’s business is four hundred dollars ($400) or more.
   2. The director shall credit the prepayments toward the appropriate tax obligations of the insurer for the current calendar year.
   3. The minimum amounts of the prepayments shall be percentages of the insurer’s tax obligation based on the preceding calendar year’s business and the current year’s rate and shall be paid to the director’s office by the due dates and in the following amounts:
      1. On or before June 15, sixty percent (60%);
      2. On or before September 15, twenty percent (20%); and
      3. On or before December 15, fifteen percent (15%).
4. On or before March 1, any balance of tax due for the preceding calendar year shall be paid to the director.
5. The effect of transferring policies of insurance from one insurer to another insurer is to transfer the tax prepayment obligation with respect to the policies.
6. This section shall not apply as to any reciprocal insurer doing exclusively a worker’s compensation business and complying with the provisions of the worker’s compensation law of this state and writing worker’s compensation only for members under that law, if its representatives or agents or the attorney in fact executing such contracts are not compensated on a commission basis.
7. This section shall not apply as to life insurance policies issued under pension plans or profit-sharing plans exempt or qualified under section 401(a), 403, 404, 408 or 501(a) of the Internal Revenue Code, as hereafter amended or renumbered from time to time, nor to annuity contracts in general.
8. This section shall not apply to any reciprocal insurer that exclusively insures members who are governmental entities, as defined by section 6-902(1), (2) and (3), Idaho Code.
9. Except as otherwise provided in this subsection, this section shall not apply as to any dental care services or as to any dental insurance authorized by title 41, Idaho Code. A tax is hereby imposed upon each contract for dental care services and dental insurance at the rate of four cents (4¢) per contract, per month, such amount to be computed each month. Tax payments shall be made consistent with the documentation requirements and payment dates set forth in this section. The tax imposed in this subsection shall be in lieu of the premium tax provided in this section and in lieu of all other taxes, licenses and fees as provided by section 41-405, Idaho Code; provided however, that this subsection shall not apply to entities governed by chapter 34, title 41, Idaho Code.
10. The amount of tax due for the current year shall be paid in full in the manner and at the times required in this section without any credit or offset for refunds or other amounts due or claimed to be due by the insurer.
11. An insurer shall round to the nearest whole dollar any amount shown or required to be shown on any return, form, statement, or other document submitted to the director. Any record or other document prepared or maintained by the director shall express any dollar amount rounded to the nearest whole dollar.

§ 41-402A. Refunds.

Where there has been an overpayment of any taxes, fines or penalties due under this chapter, the director is authorized to refund all such taxes, fines or penalties erroneously or illegally collected or paid. No such refund shall be paid after one (1) year from the due date of the statement required in section 41-402(4), Idaho Code, unless before the expiration of such period a written claim is filed therefore [therefor] by the insurer on such forms and in such manner as is prescribed by the director.

§ 41-403. Reduced tax based on Idaho investments. [Repealed.]

Repealed by S.L. 2004, ch. 356, § 3, effective January 1, 2010.

§ 41-403A. Notice of intent to claim reduced premium tax rate. [Repealed.]

§ 41-404. Penalty for failure to pay tax.

Any insurer failing to render the statement and pay the tax required under section 41-402, Idaho Code, on or before the date due, including any extension of time granted by the director pursuant to section 41-335(1), Idaho Code, shall be liable to a fine of twenty-five dollars ($25.00) for each additional day of delinquency; and the taxes may be collected by distraint and recovered by an action to be instituted by the attorney general in the name of the state in any court of competent jurisdiction. The director shall suspend or revoke the certificate of authority of the delinquent insurer until the statement is filed and the taxes and fine, if any, are fully paid.

§ 41-405. Premium tax in lieu of other taxes — Local taxes prohibited.

1. Payment to the director by an insurer of the tax upon its premiums as in this chapter required, shall be in lieu of all other taxes upon premiums, taxes upon income, franchise or other taxes measured by income, and upon the personal property of the insurer and the shares of stock or assets thereof; provided, that all real property, if any, of the insurer shall be listed, assessed and taxed the same as real property of like character of individuals.
2. The state of Idaho hereby preempts the field of imposing excise, privilege, franchise, income, license, permit, registration, and similar taxes, licenses and fees upon insurers and their agents and other representatives as such; and no county, city, municipality, district, or other political subdivision or agency in this state shall levy upon insurers, or upon their agents and representatives as such, any such tax, license or fee; nor shall any such county, city, municipality, district, political subdivision or agency require of any such insurer, agent or representative, duly authorized or licensed as such under this code, any additional authorization, license, or permit of any kind for conducting therein transactions otherwise lawful under the authority or license granted under this code.

§ 41-406. Deposit and report of fees, licenses and taxes.

1. The director shall transmit all taxes, fines and penalties collected by him to the state treasurer as provided under section 59-1014, Idaho Code. The director shall file with the state controller a statement of each deposit thus made. All such funds received shall be deposited into the department of insurance suspense account.
   1. The director may deposit up to twenty percent (20%) of the funds received in the insurance refund account which is hereby created for the purpose of repaying overpayments of any taxes, fines, and penalties or other erroneous receipts. There is hereby appropriated out of the insurance refund account so much thereof as shall be necessary for the payment of refunds. Any unencumbered balance remaining in the insurance refund account on June 30 of each and every year in excess of forty thousand dollars ($40,000) shall be transferred to the general fund and the state controller is hereby authorized and directed on such dates to make such transfers unless the board of examiners, which is hereby authorized to do so, changes the date of transfer or sum to be transferred.
   2. That portion of the premium tax, payable to the public employee retirement fund as provided in section 59-1394, Idaho Code, shall be distributed to that fund.
   3. That portion of the premium tax necessary to cover administrative costs incurred by the department in placing insurance companies or any other insurance entities into receivership or under administrative supervision, and such costs cannot be satisfied from the assets of these companies or entities, shall be distributed to the insurance insolvency administrative fund which is hereby created. There is hereby appropriated out of the insurance insolvency administrative fund so much thereof as shall be necessary, but not to exceed two hundred thousand dollars ($200,000) in any one (1) fiscal year, for the payment of the department’s administrative expenses incurred in carrying out such receiverships or supervision. A balance of one hundred thousand dollars ($100,000) shall be maintained in this fund on June 30 of each year.
   4. After all other deductions authorized in this section have been made, if the premium tax remaining exceeds forty-five million dollars ($45,000,000), one-fourth (¼) of such excess is hereby appropriated and shall be paid to the Idaho individual high risk reinsurance pool established in chapter 55, title 41, Idaho Code.
   5. The balance of the premium tax, fines and penalties shall be distributed to the general fund of the state of Idaho.
   6. All moneys received for fees, licenses and miscellaneous charges collected shall be distributed to the insurance administrative account.
2. The director shall make and file with the state controller an itemized statement of the fees, licenses, taxes, fines and penalties collected by him during the preceding month.

Such funds shall be distributed as follows:

§ 41-501. Definitions not mutually exclusive.

It is intended that certain insurance coverages may come within the definitions of two (2) or more kinds of insurance as defined in this chapter, and the inclusion of such coverage within one (1) definition shall not exclude it as to any other kind of insurance within the definition of which such coverage is likewise reasonably includable.

§ 41-502. “Life insurance” defined.

“Life insurance” is insurance on human lives. The transaction of life insurance includes also the granting of endowment benefits, additional benefits in event of death or dismemberment by accident or accidental means, additional benefits in event of the insured’s disability, and optional modes of settlement of proceeds of life insurance. Life insurance does not include workmen’s [worker’s] compensation coverages.

§ 41-503. “Disability insurance” defined.

1. “Disability insurance” includes:
   1. Insurance of human beings against bodily injury, disablement, or death by accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness, and every insurance appertaining thereto. Disability insurance does not include worker’s compensation coverages; and
   2. A managed care plan for which a certificate of authority is required pursuant to chapter 39, title 41, Idaho Code.

§ 41-504. “Property insurance” defined.

“Property insurance” is insurance on real or personal property of every kind and of every interest therein, whether on land, water, or in the air, against loss or damage from any and all hazard or cause, and against loss consequential upon such loss or damage, other than noncontractual legal liability for any such loss or damage. Property insurance does not include title insurance, as defined in section 41-508[, Idaho Code].

§ 41-505. “Marine and transportation insurance” defined.

“Marine and transportation insurance” includes:

1. Insurance against any kind of loss or damage to:
   1. Vessels, craft, aircraft, cars, automobiles and vehicles of every kind, as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same or during any delays, storage, transshipment, or reshipment incident thereto, including marine builder’s risks and all personal property floater risks, and
   2. Person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to the person arising out of the ownership, maintenance or use of automobiles), and
   3. Precious stones, jewels, jewelry, gold, silver and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise, and
   4. Bridges, tunnels and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage) unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion are the only hazards to be covered; piers, wharves, docks and slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion; other aids to navigation and transportation, including dry docks and marine railways, against all risks.
2. “Marine protection and indemnity insurance,” meaning insurance against, or against legal liability of the insured for, loss, damage or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair or construction of any vessel, craft or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person.

§ 41-506. “Casualty insurance” defined.

1. “Casualty insurance” includes:
   1. Vehicle insurance. Insurance against loss of or damage to any land vehicle or aircraft or any draft or riding animal or to property while contained therein or thereon or being loaded or unloaded therein or therefrom, from any hazard or cause, and against any loss, liability or expense resulting from or incidental to ownership, maintenance or use of any such vehicle, aircraft or animal; and provision of medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to insurance on the vehicle, aircraft or animal.
   2. Automobile guaranty. Insurance of the mechanical condition, or freedom from defective or worn parts or equipment, of motor vehicles.
   3. Liability insurance. Insurance against legal liability for the death, injury, or disability of any human being, or for damage to property; and provision of medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to liability insurance.
   4. Workmen’s [Worker’s] compensation. Insurance of the obligations accepted by, imposed upon, or assumed by employers under law for death, disablement, or injury of employees.
   5. Burglary and theft. Insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation, or wrongful conversion, disposal, or concealment, or from any attempt at any of the foregoing; including supplemental coverage for medical, hospital, surgical, and funeral expense incurred by the named insured or any other person as a result of bodily injury during the commission of a burglary, robbery, or theft by another; also insurance against loss of or damage to moneys, coins, bullion, securities, notes, drafts, acceptances, or any other valuable papers and documents, resulting from any cause.
   6. Personal property floater. Insurance upon personal effects against loss or damage from any cause, under a personal property floater.
   7. Glass. Insurance against loss or damage to glass, including its lettering, ornamentation, and fittings.
   8. Boiler and machinery. Insurance against any liability and loss or damage to property or interest resulting from accidents to or explosions of boilers, pipes, pressure containers, machinery, or apparatus, and to make inspection of and issue certificates of inspection upon boilers, machinery, and apparatus of any kind, whether or not insured.
   9. Leakage and fire extinguishing equipment. Insurance against loss or damage to any property or interest caused by the breakage or leakage of sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus, water pipes or containers, or by water entering through leaks or openings in buildings, and insurance against loss or damage to such sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus.
   10. Credit. Insurance against loss or damage resulting from failure of debtors to pay their obligations to the insured.
   11. Malpractice. Insurance against legal liability of the insured, and against loss, damage, or expense incidental to a claim of such liability, and including medical, hospital, surgical, and funeral benefits to injured persons, irrespective of legal liability of the insured, arising out of the death, injury or disablement of any person, or arising out of damage to the economic interest of any person, as the result of negligence in rendering expert, fiduciary, or professional service.
   12. Congenital defects. Insurance against congenital defects in human beings.
   13. Livestock. Insurance against loss or damage to livestock, and services of a veterinary for such animals.
   14. Elevator. Insurance against loss of or damage to any property of the insured, resulting from the ownership, maintenance or use of elevators, except loss or damage by fire, and to make inspections of and issue certificates of inspection upon, elevators.
   15. Entertainments. Insurance indemnifying the producer of any motion picture, television, radio, theatrical, sport, spectacle, entertainment, or similar production, event, or exhibition against loss from interruption, postponement, or cancellation thereof due to death, accidental injury, or sickness of performers, participants, directors, or other principals.
   16. Failure to file certain instruments. Insurance against loss resulting from failure to file or record written instruments affecting the title of or creating a lien upon personal property.
   17. Miscellaneous. Miscellaneous casualty insurance shall include, but not be limited to, credit unemployment insurance indemnifying a debtor for installment or other periodic payments on the indebtedness while a debtor suffers a loss of income due to involuntary unemployment. Insurance against any other kind of loss, damage, or liability properly a subject of insurance and not within any other kind of insurance as defined in this chapter, if such insurance is not disapproved by the director as being contrary to law or public policy.
2. Provision of medical, hospital, surgical, and funeral benefits, and of coverage against accidental death or injury, as incidental to and part of other insurance as stated under subdivisions (a) (vehicle), (c) (liability), (e) (burglary), and (k) (malpractice) of subsection (1) shall for all purposes be deemed to be the same kind of insurance to which it is so incidental, and shall not be subject to provisions of this code applicable to life or disability insurances.

§ 41-507. “Surety insurance” defined.

“Surety insurance” includes:

1. Fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust.
2. Insurance or guaranty of the obligations of employers under workmen’s [worker’s] compensation laws.
3. Insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings, and contracts of suretyship.
4. Insurance indemnifying banks, bankers, brokers, financial or moneyed corporations or associations against loss, resulting from any cause, of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts or other valuable papers, documents, money, precious metals and articles made therefrom, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, including any loss while the same are being transported in armored motor vehicles, or by messenger, but not including any other risks of transportation or navigation; also insurance against loss or damage to such an insured’s premises or to his furniture, furnishings, fixtures, equipment, safes, and vaults therein, caused by burglary, robbery, theft, vandalism or malicious mischief, or any attempt thereat.

§ 41-508. “Title insurance” defined.

1. “Title insurance” is the certification or guarantee of title or ownership, or insurance of owners of property or others having an interest therein or liens or encumbrances thereon, against loss by encumbrance, or defective titles, or invalidity, or adverse claim to title. This definition shall not be deemed to apply as to the business of preparing and issuing abstracts of, but not certifying, guaranteeing, or insuring, title to or ownership of property or certifying to the validity of documents relative to such title.
2. A title insurer may also insure:
   1. The identity, due execution, and validity of any note or bond secured by mortgage or deed of trust; and
   2. The identity, due execution, validity and recording of any such mortgage or deed of trust.

§ 41-509. Limit of risk.

1. No insurer shall retain any risk on any one subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding ten percent (10%) of its surplus to policyholders.
2. A “subject of insurance” for the purposes of this section, as to insurance against fire and hazards other than windstorm, earthquake and other catastrophic hazards, includes all properties insured by the same insurer which are customarily considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of any other hazard insured against.
3. Reinsurance ceded as authorized by section 41-511, Idaho Code shall be deducted in determining risk retained. As to surety risks, deduction shall also be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged, or held subject to the surety’s consent and for the surety’s protection.
4. As to alien insurers, this section shall relate only to risks and surplus to policyholders of the insurer’s United States branch.
5. “Surplus to policyholders” for the purposes of this section, in addition to the insurer’s capital and surplus, shall be deemed to include any voluntary reserves which are not required pursuant to law, and shall be determined from the last sworn statement of the insurer on file with the director, or by the last report of examination of the insurer, whichever is the more recent at time of assumption of risk.
6. This section shall not apply to life or disability insurance, annuities, title insurance, insurance of wet marine and transportation risks, worker’s compensation insurance, employers’ liability coverages, nor to any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy.

§ 41-510. “Reinsurance” defined.

“Reinsurance” is a contract under which an originating insurer (called the “ceding” insurer) procures insurance for itself in another insurer (called the “assuming” insurer or the “reinsurer”) with respect to part or all of an insurance risk of the originating insurer.

§ 41-511. Authorized reinsurance.

1. An insurer may accept reinsurance only of such risks, and retain risk thereon within such limits, as it is otherwise authorized to insure.
2. Except as provided in sections 41-512, 41-2856 (mergers and consolidations of stock insurers) and 41-2858, Idaho Code (bulk reinsurance, mutual insurers), an insurer may reinsure all or any part of any particular Idaho risk with an insurer authorized to transact such insurance in this state, or in any other solvent insurer approved or accepted by the director for the purpose of such reinsurance. The director shall not so approve or accept any such reinsurance by a ceding domestic insurer in an unauthorized insurer which he finds for good cause would be contrary to the interests of the policy holders or stockholders of such domestic insurer. The director shall not so approve any foreign reinsurer that possesses surplus as to policy holders in an amount less than that required under section 41-313, Idaho Code, of a foreign stock insurer authorized to transact in this state the same kind or kinds of insurance as that ceded.
3. Upon request of the director, a ceding insurer shall promptly inform the director in writing of the cancellation or any other material change of any of its reinsurance treaties or arrangements.
4. This section does not apply to marine and transportation insurance.

§ 41-514. Purpose.

The purpose of sections 41-514 and 41-515, Idaho Code, is to protect the interest of insureds, claimants, ceding insurers, assuming insurers and the public generally. The legislature hereby declares its intent to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom they owe obligations. In furtherance of that state interest, the legislature hereby provides a mandate that upon the insolvency of a non-United States insurer or reinsurer that provides security to fund its United States obligations in accordance with this chapter, the assets representing the security shall be maintained in the United States, and claims shall be filed with and valued by the state insurance director with regulatory oversight, and the assets shall be distributed, in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurance companies. The legislature declares that the matters contained in this chapter are fundamental to the business of insurance in accordance with 15 U.S.C. 1011 and 1012.

§ 41-515. Credit for reinsurance.

1. Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of paragraph (a), (b), (c), (d), (e) or (f) of subsection (2) of this section; provided further, that the director may adopt by rule pursuant to subsection (5)(a) of this section specific additional requirements relating to or setting forth:
   1. The valuation of assets or reserve credits;
   2. The amount and forms of security supporting reinsurance arrangements described in subsection (5)(a) of this section; and
   3. The circumstances pursuant to which credit will be reduced or eliminated.
2. Credit shall be allowed under paragraph (a), (b), or (c) of this subsection only, as respects cessions of those kinds or classes of business which the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. Credit shall be allowed under paragraph (c) or (d) of this subsection only if the applicable requirements of paragraph (g) of this subsection have been satisfied.
   1. Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in this state.
   2. Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is accredited by the director as a reinsurer in this state. In order to be eligible for accreditation, a reinsurer must:
      1. File with the director evidence of its submission to this state’s jurisdiction;
      2. Submit to this state’s authority to examine its books and records;
      3. Be 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, be entered through and licensed to transact insurance or reinsurance in at least one (1) state;
      4. File annually with the director a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement; and
      5. Demonstrate to the satisfaction of the director that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement as of the time of its application if it maintains a surplus as regards policyholders in an amount not less than twenty million dollars ($20,000,000) and its accreditation has not been denied by the director within ninety (90) days after submission of its application.
   3. Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is domiciled 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 this statute and the assuming insurer or United States branch of an alien assuming insurer:
      1. Maintains a surplus as regards policyholders in an amount not less than twenty million dollars ($20,000,000); and (ii) Submits to the authority of this state to examine its books and records.
   4. 1. Credit shall be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified United States financial institution, as defined in subsection (4)(b) of this section for the payment of the valid claims of its United States policyholders and ceding insurers, their assigns and successors in interest. The assuming insurer shall report annually to the director information substantially the same as that required to be reported on the national association of insurance commissioners (NAIC) annual statement form by licensed insurers to enable the director to determine the sufficiency of the trust fund. The assuming insurer shall submit to examination of its books and records by the director and bear the expense of examination. (d)(i) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified United States financial institution, as defined in subsection (4)(b) of this section for the payment of the valid claims of its United States policyholders and ceding insurers, their assigns and successors in interest. The assuming insurer shall report annually to the director information substantially the same as that required to be reported on the national association of insurance commissioners (NAIC) annual statement form by licensed insurers to enable the director to determine the sufficiency of the trust fund. The assuming insurer shall submit to examination of its books and records by the director and bear the expense of examination.
      2. Credit for reinsurance shall not be granted under this paragraph, unless the form of the trust and any amendments to the trust have been approved by:
      3. The following requirements apply to the following categories of assuming insurer:
         1. The director of the state where the trust is domiciled; or
         2. The director of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust.
      4. In the case of a group of incorporated underwriters under common administration, the group shall:
      5. An association including incorporated and individual unincorporated underwriters may be a certified reinsurer. In order to be eligible for certification, in addition to satisfying the requirements of subparagraph (i) of this paragraph:
      6. The director shall create and publish a list of qualified jurisdictions under which an assuming insurer licensed and domiciled in such jurisdiction is eligible to be considered for certification by the director as a certified reinsurer.
      7. The director shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies deemed acceptable to the director pursuant to rulemaking. The director shall publish a list of all certified reinsurers and their ratings.
      8. A certified reinsurer shall secure obligations assumed from United States ceding insurers under this subsection at a level consistent with its rating, as specified in rulemaking promulgated by the director.
      9. 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 has the discretion to defer to the rating assigned by that jurisdiction, and such assuming insurer shall be considered to be a certified reinsurer in this state. (vii) A certified reinsurer that ceases to assume new business in this state may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of subparagraph (v) of this paragraph, and the director shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business.
   5. Credit shall be allowed when the reinsurance is ceded to an assuming insurer that has been certified by the director as a reinsurer in this state and has secured its obligations in accordance with the following requirements:
   6. In order to be eligible for certification, the assuming insurer must:
      1. Be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the director pursuant to subparagraph (iii) of this paragraph;
      2. Maintain minimum capital and surplus, or the equivalent, in an amount to be determined by the director pursuant to rule; 3. Maintain financial strength ratings from two (2) or more rating agencies deemed acceptable by the director pursuant to rule;
      3. With respect to obligations incurred by a certified reinsurer under this subparagraph, if the security is insufficient, the director shall reduce the allowable credit by an amount proportionate to the deficiency and has the discretion to impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurer’s obligations will not be paid in full when due.
      4. For purposes of this subparagraph, a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure one hundred percent (100%) of its obligations. As used here, the term “terminated” refers to revocation, suspension, voluntary surrender and inactive status. If the director continues to assign a higher rating as permitted by other provisions of this section, this requirement does not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.
   7. If the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in this state, the credit permitted in paragraphs (c) and (d) of this subsection shall not be allowed unless the assuming insurer agrees in the reinsurance agreements:
   8. If the assuming insurer does not meet the requirements of paragraph (a), (b) or (c) of this subsection, the credit permitted by paragraph (d) or (e) of this subsection shall not be allowed unless the assuming insurer agrees in the trust agreements to the following conditions:
   9. If the trust fund is inadequate because it contains an amount less than the amount required by paragraph (d)(iii) of this subsection, 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 with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the director with regulatory oversight all of the assets of the trust fund.
   10. The following provisions apply regarding the concentration of risk:

The requirement of subparagraph (i) of this paragraph does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system.

The form of the trust and any trust amendments also shall be filed with the director of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in its trustees for the benefit of the assuming insurer’s United States ceding insurers, their assigns and successors in interest. The trust and the assuming insurer shall be subject to examination as determined by the director. The trust shall remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust. No later than February 28 of each year, the trustees of the trust shall report to the director in writing the balance of 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 next following December 31.

1. 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 ceding 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 (iii)2. of this paragraph.
2. 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 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. 3. In the case of a group that includes incorporated and individual unincorporated underwriters:
   1. For reinsurance ceded under reinsurance agreements with an inception, amendment or renewal date on or after January 1, 1993, the trust shall consist of a trusteed account 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, the trust shall consist of a trusteed account 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 in trust a trusteed surplus of which one hundred million dollars ($100,000,000) shall be held jointly for the benefit of United States ceding insurers of any member of the group for all years of the account.
3. Maintain a trust fund in an amount not less than the group’s several liabilities attributable to business ceded by United States domiciled ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group;
4. 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 as additional security for these liabilities; and
5. Within ninety (90) days after its financial statements are due to be filed with the group’s domiciliary regulator, make available to the director an annual certification of each underwriter member’s solvency by the member’s domiciliary regulator and financial statements of each underwriter member of the group prepared by its independent public accountant.
6. Satisfy any other requirements for certification deemed relevant by the director.
   1. That in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, will comply with all requirements necessary to give such court jurisdiction, and will abide by the final decision of such court or of any appellate court in the event of an appeal; and
   2. To designate the director or a designated attorney as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the ceding company.
   3. The assets shall be distributed by, and claims shall be filed with and valued by, the director with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies.
   4. If the director with regulatory oversight determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the assets or part thereof shall be returned by the director with regulatory oversight to the trustee for distribution in accordance with the trust agreement.
   5. The grantor shall waive any right otherwise available to it under United States law that is inconsistent with this provision.
      1. If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the director may suspend or revoke the reinsurer’s accreditation or certification.
         1. The director must give the reinsurer notice and opportunity for hearing. The suspension or revocation may not take effect until after the director’s order on hearing, unless: 1. The reinsurer waives its right to hearing;
         2. While a reinsurer’s accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit, except to the extent that the reinsurer’s obligations under the contract are secured in accordance with subsection (3) of this section. If a reinsurer’s accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation, except to the extent that the reinsurer’s obligations under the contract are secured in accordance with paragraph (e)(v) of this subsection or with subsection (3) of this section.
            1. A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the director within thirty (30) days after reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, exceeds fifty percent (50%) of the domestic ceding insurer’s last reported surplus to policyholders, or after it is determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.
            2. A ceding insurer shall take steps to diversify its reinsurance program. A domestic ceding insurer shall notify the director within thirty (30) days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than twenty percent (20%) of the ceding insurer’s gross written premium in the prior calendar year, or after it has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.
7. An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements in subsection (2) of this section shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer; provided further, that the director may adopt by rule pursuant to subsection (5)(a) of this section specific additional requirements relating to or setting forth the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements described in subsection (5)(a) of this section, and the circumstances pursuant to which credit will be reduced or eliminated. 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 ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder, if the security is 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 subsection (4)(b) of this section. This security may be in the form of:
   1. Cash;
   2. 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; (c) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution as defined in subsection (4)(a) of this section no later than December 31 of the year for which the filing is being made, and in the possession of, or in trust for, the ceding company 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
8. 1. For purposes of subsection (3)(c) of this section a “qualified United States financial institution” means an institution that: (4)(a) For purposes of subsection (3)(c) of this section a “qualified United States financial institution” means an institution that:
      1. Is organized or (in the case of a United States office of a foreign banking organization) licensed, under the laws of the United States or any state thereof;
      2. Is regulated, supervised and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and
      3. Has been determined by either the director or the securities valuation office of the NAIC, to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the director.
   2. A “qualified United States financial institution” means, for purposes of the provisions of this statute specifying those institutions that are eligible to act as a fiduciary of a trust, an institution that:
      1. Is an organization, or (in the case of a United States branch or agency office of a foreign banking organization) licensed, under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers; and
      2. Is regulated, supervised and examined by federal or state authorities having regulatory authority over banks and trust companies.
9. The director may adopt rules implementing the provisions of this chapter.
   1. The director is further authorized to adopt rules applicable to reinsurance arrangements described in subparagraph (i) of this paragraph.
      1. A rule adopted pursuant to this subparagraph may apply only to reinsurance relating to: life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits; universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period; variable annuities with guaranteed death or living benefits; long-term care insurance policies; or such other life and health insurance and annuity products as to which the NAIC adopts model regulatory requirements with respect to credit for reinsurance.
      2. A rule adopted pursuant to subparagraph (i) of this paragraph concerning life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits or universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period may apply to any treaty containing policies issued on or after January 1, 2015, and policies issued prior to January 1, 2015, if risk pertaining to such pre-2015 policies is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015.
      3. A rule adopted pursuant to this paragraph may require the ceding insurer, in calculating the amounts or forms of security required to be held under rules promulgated under this authority, to use the valuation manual referenced in section 41-612, Idaho Code. (iv) A rule adopted pursuant to this paragraph shall not apply to cessions to an assuming insurer that:
         1. Is certified in this state or, if this state has not adopted provisions substantially equivalent to subsection (2)(e) of this section, certified in a minimum of five (5) other states; or
         2. Maintains at least two hundred fifty million dollars ($250,000,000) in capital and surplus when determined in accordance with the NAIC accounting practices and procedures manual, referenced in section 41-335, Idaho Code, and is:
            1. Licensed in at least twenty-six (26) states; or
            2. Licensed in at least ten (10) states, and licensed or accredited in a total of at least thirty-five (35) states.
   2. The authority to adopt rules pursuant to paragraph (a) of this subsection does not limit the director’s general authority to adopt rules pursuant to this subsection.
10. The provisions of this section shall apply to all cessions after the effective date of this act under reinsurance agreements that have had an inception, anniversary, or renewal date not less than six (6) months after the effective date of this act.

The incorporated members of the group 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 solvency regulation and control by the group’s domiciliary regulator as are the unincorporated members. Within ninety (90) days after its financial statements are due to be filed with the group’s domiciliary regulator, the group shall provide to the director an annual certification by the group’s domiciliary regulator of the solvency of each underwriter member; or if certification is unavailable, financial statements prepared by independent public accountants of each underwriter member of the group.

1. Have continuously transacted an insurance business outside the United States for at least three (3) years immediately prior to making application for accreditation;

2. Maintain aggregate policyholders’ surplus of ten billion dollars ($10,000,000,000);

4. Agree to submit to the jurisdiction of this state, appoint the director as its agent for service of process in this state and agree 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;

5. 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; and

1. The association shall satisfy its minimum capital and surplus requirements through the capital and surplus equivalents (net of liabilities) of the association and its members, which shall include a joint central fund that may be applied to any unsatisfied obligation of the association or any of its members, in an amount determined by the director to provide adequate protection;

2. The incorporated members of the association shall not be engaged in any business other than underwriting as a member of the association and shall be subject to the same level of regulation and solvency control by the association’s domiciliary regulator as are the unincorporated members; and

3. Within ninety (90) days after its financial statements are due to be filed with the association’s domiciliary regulator, the association shall provide to the director an annual certification by the association’s domiciliary regulator of the solvency of each underwriter member; or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the association.

1. 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 appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits and the extent of reciprocal recognition afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the United States. A qualified jurisdiction must agree to share information and cooperate with the director with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the director has determined that the jurisdiction does not adequately and promptly enforce final United States judgments and arbitration awards. Additional factors may be considered in the discretion of the director.

2. 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 in accordance with criteria to be developed under rulemaking.

3. United States jurisdictions that meet the requirement for accreditation under the NAIC financial standards and accreditation program shall be recognized as qualified jurisdictions. 4. If a certified reinsurer’s domiciliary jurisdiction ceases to be a qualified jurisdiction, the director has the discretion to suspend the reinsurer’s certification indefinitely, in lieu of revocation.

1. In order for a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the director and consistent with the provisions of subsection (3) of this section, or in a multibeneficiary trust in accordance with paragraph (d) of this subsection, except as otherwise provided in this paragraph.

2. If a certified reinsurer maintains a trust to fully secure its obligations subject to paragraph (d) of this subsection and chooses to secure its obligations incurred as a certified reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this paragraph or comparable laws of other United States jurisdictions and for its obligations subject to paragraph (d) of this subsection. It shall be a condition to the grant of certification under this paragraph that the certified reinsurer shall have bound itself by the language of the trust and agreement with the director with principal regulatory oversight of each such trust account to fund, upon termination of any such trust account, out of the remaining surplus of such trust, any deficiency of any other such trust account.

3. The minimum trusteed surplus requirements provided in paragraph (d) of this subsection are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under this paragraph, except that such trust shall maintain a minimum trusteed surplus of ten million dollars ($10,000,000).

(f) Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of paragraph (a), (b), (c), (d) or (e) of this subsection, but only with respect to the insurance of risks located in jurisdictions where such reinsurance is required by applicable law or regulation of that jurisdiction.

This provision is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes, if such an obligation is created in the agreement.

2. The director’s order is based on regulatory action by the reinsurer’s domiciliary jurisdiction or the voluntary surrender or termination of the reinsurer’s eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer under paragraph (e)(vi) of this subsection; or

3. The director finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the director’s order.

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

§ 41-516. Individual or group accident and sickness insurance defined.

“Individual or group accident and sickness insurance” means any policy insuring against loss resulting from sickness or from bodily injury or death by accident, or both. “Individual or group accident and sickness insurance” shall also include comprehensive major medical coverage for medical and surgical benefits and high deductible health plans sold or maintained under the applicable provisions of section 223 of the Internal Revenue Code.

§ 41-601. “Assets” defined.

In any determination of the financial condition of an insurer, there shall be allowed as assets only such assets as are owned by the insurer and which consist of:

1. Cash in the possession of the insurer, or in transit under its control, and including the true balance of any deposit in a solvent bank or trust company.
2. Investments, securities, properties and loans acquired or held in accordance with this code, and in connection therewith the following items:
   1. Interest due or accrued on any bond or evidence of indebtedness which is not in default and which is not valued on a basis including accrued interest.
   2. Declared and unpaid dividends on stock and shares, unless such amount has otherwise been allowed as an asset.
   3. Interest due or accrued upon a collateral loan in an amount not to exceed one (1) year’s interest thereon.
   4. Interest due or accrued on deposits in solvent banks and trust companies, and interest due or accrued on other assets, if such interest is in the judgment of the director a collectible asset.
   5. Interest due or accrued on a mortgage loan, not in default of the contractual principal payments and the contractual interest payments, pursuant to the contractual terms of the loan, in an amount not exceeding in any event the amount, if any, of the excess of the value of the property less delinquent taxes thereon over the unpaid principal; but in no event shall interest accrued for a period in excess of eighteen (18) months be allowed as an asset.
   6. Rent due or accrued on real property if such rent is not in arrears for more than three (3) months, and rent more than three (3) months in arrears if the payment of such rent be adequately secured by property held in the name of the tenant and conveyed to the insurer as collateral.
   7. The unaccrued portion of taxes paid prior to the due date on real property.
3. Premium notes, policy loans, and other policy assets and liens on policies and certificates of life insurance and annuity contracts and accrued interest thereon, in an amount not exceeding the legal reserve and other policy liabilities carried on each individual policy.
4. The net amount of uncollected and deferred premiums and annuity considerations in the case of a life insurer.
5. Premiums in the course of collection, other than for life insurance, not more than three (3) months past due, less commissions payable thereon. The foregoing limitation shall not apply to premiums payable directly or indirectly by the state of Idaho, any department, board, agency, or institution thereof, or any other political subdivision of the state of Idaho, including municipalities or specially chartered subdivisions, or by the United States government or by any of its instrumentalities.
6. Installment premiums other than life insurance premiums to the extent of the unearned premium reserve carried on the policy to which premiums apply.
7. Notes and like written obligations not past due, taken for premiums other than life insurance premiums, on policies permitted to be issued on such basis, to the extent of the unearned premium reserves carried thereon.
8. The full amount of reinsurance recoverable by a ceding insurer from a solvent reinsurer and which reinsurance is authorized under section 41-511, Idaho Code.
9. Amounts receivable by an assuming insurer representing funds withheld by a solvent ceding insurer under a reinsurance treaty.
10. Deposits or equities recoverable from underwriting associations, syndicates and reinsurance funds, or from any suspended banking institution, to the extent deemed by the director available for the payment of losses and claims and at values to be determined by him.
11. Electronic and mechanical machines constituting a data processing and accounting system if the cost of such system is at least twenty-five thousand dollars ($25,000), which cost shall be amortized in full over a period not to exceed ten (10) calendar years.
12. All office equipment, office furniture, private passenger automobiles, deemed necessary for conduct of insurance business, the aggregate amount of which shall not at any one time exceed one percent (1%) of the other assets of the insurer.
13. All assets, whether or not consistent with the provisions of this section, as may be allowed pursuant to the annual statement form approved by the director for the kinds of insurance to be reported upon therein.
14. Other assets, not inconsistent with the provisions of this section, deemed by the director to be available for the payment of losses and claims, at values to be determined by him.

§ 41-602. Assets as deductions from liabilities.

Assets may be allowed as deductions from corresponding liabilities, and liabilities may be charged as deductions from assets, and deductions from assets may be charged as liabilities, in accordance with the form of annual statement applicable to the insurer as prescribed by the director, or otherwise in his discretion.

§ 41-603. Assets not allowed.

In addition to assets impliedly excluded by the provisions of section 41-601, Idaho Code, the following expressly shall not be allowed as assets in any determination of the financial condition of an insurer:

1. Good will, trade names and other like intangible assets, except as expressly permitted and as prescribed by the national association of insurance commissioners’ accounting practices and procedures.
2. Advances to officers (other than policy loans) whether secured or not, and advances to employees, agents and other persons on personal security only.
3. Stock of such insurer, owned by it, or any material equity therein or loans secured thereby, or any material proportionate interest in such stock acquired or held through the ownership by such insurer of an interest in another firm, corporation or business unit.
4. Furniture, fixtures, furnishings, safes, vehicles (except as authorized in paragraph (12), section 41-601, Idaho Code), libraries, stationery, literature, and other equipment, machines, and supplies (other than data processing and accounting systems authorized under section 41-601(11), Idaho Code), except in the case of title insurers such materials and plants as the insurer is expressly authorized to invest in under section 41-726, Idaho Code, and except, in the case of any insurer, such personal property as the insurer is permitted to hold pursuant to chapter 7, title 41, Idaho Code, or which is reasonably necessary for the maintenance and operation of real estate lawfully acquired and held by the insurer other than real estate used by it for home office, branch office and similar purposes.
5. The amount, if any, by which the aggregate book value of investments is carried in the ledger assets of the insurer exceeds the aggregate value thereof as determined under this code.

§ 41-604. Disallowance of “wash” transactions.

1. The director shall disallow as an asset or as a credit against liabilities any reinsurance found by him after a hearing thereon to have been arranged for the purpose principally of deception as to the ceding insurer’s financial condition as of the date of any financial statement of the insurer. Without limiting the general purport of the foregoing provision, reinsurance of any substantial part of the insurer’s outstanding risks contracted for in fact within four (4) months prior to the date of any such financial statement and canceled in fact within four (4) months after the date of such statement, or reinsurance under which the reinsurer bears no substantial insurance risk or substantial risk of net loss to itself, shall prima facie be deemed to have been arranged for the purpose principally of deception within the intent of this provision.
2. The director shall disallow as an asset any deposit, funds or other assets of the insurer found by him after a hearing thereon:
   1. Not to be in good faith the property of the insurer, and
   2. Not freely subject to withdrawal or liquidation by the insurer at any time for the payment or discharge of claims or other obligations arising under its policies, and
   3. To be resulting from arrangements made principally for the purpose of deception as to the insurer’s financial condition as of the date of any financial statement of the insurer.
3. No such disallowance of assets or credits shall be valid unless made by the director after a hearing of which notice was given the insurer within six (6) months after the date the financial statement of the insurer as to which such deception is claimed was filed with the director.
4. The director may suspend or revoke the certificate of authority of any insurer which has knowingly been a party to any such deception or attempt thereat.

§ 41-605. Liabilities, in general.

In any determination of the financial condition of an insurer, capital stock and liabilities to be charged against its assets shall include:

1. The amount of its capital stock outstanding, if any.
2. The amount, estimated consistent with the provisions of this code, necessary to pay all of its unpaid losses and claims incurred on or prior to the date of statement, whether reported or unreported, together with the expenses of adjustment or settlement thereof.
3. With reference to life and disability insurance and annuity contracts:
   1. The amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest, and methods adopted pursuant to this code which are applicable thereto.
   2. Reserves for disability benefits, for both active and disabled lives.
   3. Reserves for accidental death benefits.
   4. Any additional reserves which may be required by the director consistent with applicable customary and general practice in insurance accounting.
4. With reference to insurance other than specified in subsection (3) of this section, and other than title insurance, the amount of reserves equal to the unearned portions of the gross premiums charged on policies in force, computed in accordance with this chapter.
5. Taxes, expenses and other obligations due or accrued at the date of the statement.

§ 41-606. Unearned premium reserve.

1. As to insurance against loss or damage to property (except as provided in section 41-607[, Idaho Code]), and as to all general casualty insurance and surety insurance, every insurer shall maintain an unearned premium reserve on all policies in force.
2. The director may require that such reserves shall be equal to the unearned portions of the gross premiums in force after deducting applicable reinsurance in solvent insurers as computed on each respective risk from the policy’s date of issue. If the director does not so require, the portions of the gross premium in force, less applicable reinsurance in solvent insurers, to be held as an unearned premium reserve, shall be computed according to the following table:
3. In lieu of computation according to the foregoing table, the insurer at its option may compute all of such reserves on a monthly or more frequent pro rata basis.
4. After adopting a method for computing such reserve, an insurer shall not change methods without approval of the insurance supervisory official of the insurer’s domicile.
5. This section does not apply to title insurance.

1 year or less

½

2 years

1st year

¾

2nd year

¼

3 years

1st year

5/6

2nd year

½

3rd year

1/6

4 years

1st year

7/8

2nd year

5/8

3rd year

3/8

4th year

1/8

5 years

1st year

9/10

2nd year

7/10

3rd year

½

4th year

3/10

5th year

1/10

Over 5 years

pro rata

§ 41-607. Unearned premium reserve for marine and transportation insurance.

As to marine and transportation insurance, the entire amount of premiums on trip risks not terminated shall be deemed unearned; and the director may require the insurer to carry a reserve equal to one hundred per cent (100%) of premiums on trip risks written during the month ended as of the date of statement.

§ 41-608. Reserve for disability insurance.

For all disability insurance policies the insurer shall maintain an active life reserve which shall place a sound value on its liabilities under such policies and be not less than the reserve according to appropriate standards set forth in regulations issued by the director and, in no event, less in the aggregate than the pro rata gross unearned premiums for such policies.

§ 41-609. Loss reserves, liability insurance and worker’s compensation.

Where called for by the form of annual statement required of the insurer, the reserve for outstanding losses under insurance against loss or damage from accident to or injuries suffered by an employee or other person and for which the insured is liable, shall be computed in accordance with the annual statement instructions and the accounting and procedures manual adopted by the national association of insurance commissioners, as provided in section 41-335, Idaho Code.

§ 41-610. Increase of inadequate loss reserves.

If loss experience shows that an insurer’s loss reserves, however computed or estimated, are inadequate, the director shall require the insurer to maintain loss reserves in such additional amount as is needed to make them adequate. This section does not apply as to life insurance.

§ 41-611. Reserve for losses and unearned premiums — Title insurers.

1. Each title insurer shall maintain a special reserve in adequate amount to cover its liability as to losses incurred under policies issued by it.
2. Each domestic title insurer shall establish and maintain a reserve for unearned premiums on its policies and guaranties in force. Such reserve shall at all times and for all purposes be considered a separate and distinct trust fund and shall be deemed and considered and shall constitute unearned portions of the original premiums and shall be charged as a reserve liability of the insurer in determining its financial condition. On all title insurance policies heretofore issued by the insurer, an unearned premiums reserve shall be set up and hereafter maintained in the amount which would have accumulated, as of the effective date of this code, if the foregoing requirement had been in existence ever since the date of the policy. Such reserve shall be computed as follows:
   1. With respect to owners and/or purchasers policies perpetual in term, monthly at the close of each month beginning as of July 1, 1947, the insurer shall set aside into the reserve ten per cent (10%) of the risk portion of the gross premium or fees received or to be received on account of policies written during the next preceding calendar month. After any such policy has been in force for ten (10) years, or upon earlier termination thereof for any cause, that portion of the reserve related thereto shall be released and may be used by the insurer thereafter for any lawful purpose.
   2. With respect to mortgage policies having a term, it shall be assumed for the purposes of this provision that all such policies have an average term of five (5) years from date of issue, and the unearned premium reserve thereon, commencing as of July 1, 1947, shall be computed upon the risk portion of the gross premium or fees charged for the policy according to the table for five (5) year term policies as provided in section 41-606(2)[, Idaho Code,] (unearned premium reserve). If such reserve is determined as at any date other than December 31 of any year, the reserve shall be computed on a pro rata basis for the elapsed months of the calendar year in which the computation is made.
   3. If at any time, after examination of the insurer, the director determines that its reserve for unearned premiums computed as hereinabove provided is inadequate for the reasonable protection of its policy holders, the director may by order made after hearing thereon require such reserve to be computed upon such reasonable basis as may be prescribed in the order. No such order shall be retroactively effective.
3. The unearned premium reserve of a foreign insurer shall be as prescribed or permitted by the laws of the insurer’s domicile, unless found by the director to be inadequate for the reasonable protection of the insurer’s Idaho policy holders. In event of such a finding, the insurer shall maintain unearned premium reserves upon business thereafter written in an amount not less than the reserves which would then be required of a domestic title insurer hereunder writing the same business.

§ 41-611A. Mortgage guaranty insurance — Contingency reserve.

In addition to reserves for unearned premiums and losses, as to mortgage guaranty insurance transacted by it an insurer shall establish and maintain a contingency reserve out of net premiums (gross premiums less premiums returned to policy holders) remaining after establishment of the unearned premium reserve. To the contingency reserve the insurer shall contribute an amount equal to fifty per cent (50%) of such remaining premiums. The annual contributions to the contingency reserve made during each calendar year shall be maintained for a period of one hundred twenty (120) months; except that in any year in which incurred losses of the insurer under mortgage guaranty insurance policies exceed thirty-five per cent (35%) of the corresponding earned premiums, the insurer may withdraw from the contingency reserve an amount equal to not more than the amount of such excess.

§ 41-612. Standard valuation law — Life insurance.

1. 1. This section shall be known as the standard valuation law. (1)(a) This section shall be known as the standard valuation law.
   2. For the purposes of this section the following definitions shall apply on or after the operative date of the valuation manual:
      1. “Accident and health insurance” means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness or medical conditions and as may be specified in the valuation manual. As used in this section and in the valuation manual, this term is synonymous with disability insurance as defined in section 41-503, Idaho Code.
      2. “Appointed actuary” means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required in subsection (12)(b) of this section.
      3. “Company” means an entity, which (a) has written, issued or reinsured life insurance contracts, accident and health insurance contracts or deposit-type contracts in this state and has at least one (1) such policy in force or on claim or (b) has written, issued or reinsured life insurance contracts, accident and health insurance contracts or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance or deposit-type contracts in this state.
      4. “Deposit-type contract” means contracts that do not incorporate mortality or morbidity risks, and as may be specified in the valuation manual.
      5. “Life insurance” means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual.
      6. “NAIC” means the national association of insurance commissioners.
      7. “Policyholder behavior” means any action a policyholder, contract holder or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract subject to this section including, but not limited to, lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policy or contract, but excluding events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract.
      8. “Principle-based valuation” means a reserve valuation that uses one (1) or more methods or one (1) or more assumptions determined by the insurer and is required to comply with subsection (15) of this section as specified in the valuation manual.
      9. “Qualified actuary” means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American academy of actuaries qualification standards for actuaries signing such statements and who meets the requirements specified in the valuation manual.
      10. “Tail risk” means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude.
      11. “Valuation manual” means the manual of valuation instructions adopted by the NAIC as specified in this section or as subsequently amended.
      12. The provisions set forth in subsections (4), (4a), (4b), (5), (6), (7), (8), (9), (10), (11) and (13) of this section shall apply to all policies and contracts, as appropriate, subject to this section, issued on or after the operative date specified in section 41-1927, Idaho Code, and prior to the operative date of the valuation manual, and the provisions set forth in subsections (14) and (15) of this section shall not apply to any such policies and contracts.
      13. The minimum standard for the valuation of policies and contracts issued prior to January 1, 1914, shall be that provided by the laws in effect immediately prior to that date.
2. Annual valuation.
   1. Policies and contracts issued prior to the operative date of the valuation manual. (i) The director shall annually value, or cause to be valued, the reserve liabilities (hereinafter “reserves”) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurer doing business in this state, and issued on or after the operative date specified in section 41-1927, Idaho Code, and prior to the operative date of the valuation manual. In the case of an alien insurer, such valuation shall be limited to its insurance transactions in the United States. In calculating such reserves, the director may use group methods and approximate averages for fractions of a year or otherwise. He may accept in his discretion the insurer’s calculation of such reserves. In lieu of the valuation of the reserves required of any foreign or alien insurer, he may accept any valuation made or caused to be made by the insurance supervisory official of any state or other jurisdiction when such valuation complies with the minimum standard provided in this section. Where any such valuation is made by the director, he may use the actuary of the department or employ an actuary for the purpose, and the reasonable compensation and expenses of the actuary, at a rate approved by the director, upon demand by the director supported by an itemized statement of such compensation and expenses, shall be paid by the insurer. When a domestic insurer furnishes the director with a valuation of its outstanding policies as computed by its own actuary or by an actuary deemed satisfactory for the purpose by the director, the valuation shall be verified by the actuary of the department without costs to the insurer.
   2. Policies and contracts issued on or after the operative date of the valuation manual.
      1. The director shall annually value, or cause to be valued, the reserve liabilities (hereinafter “reserves”) for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every company issued on or after the operative date of the valuation manual. In lieu of the valuation of the reserves required of a foreign or alien company, the director may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this section.
      2. The provisions set forth in subsections (14) and (15) of this section shall apply to all policies and contracts issued on or after the operative date of the valuation manual.
3. Except as provided in subsections (4) and (4a) of this section, the minimum standard for the valuation of such policies and contracts issued on and after January 1, 1914, and prior to the operative date of section 41-1927, Idaho Code, (standard nonforfeiture law) shall be the American experience table of mortality and interest at three and one-half percent (3 ½%) per annum. Not more than one (1) year shall be used as a preliminary term. Extra charges may be made in particular cases of invalid lives and other extra hazards, policies may be valued in groups, and approximate averages may be used for fractions of a year. Policies other than ordinary and twenty (20) payment life may be valued according to the modified preliminary term, with twenty (20) payment life policies as a basis for such valuation. This subsection applies only as to policies and contracts issued prior to the operative date of section 41-1927, Idaho Code. (4) Except as otherwise provided in subsections (4a) and (4b) of this section, the minimum standard for the valuation of all such policies and contracts issued on or after the operative date of section 41-1927, Idaho Code, (standard nonforfeiture law) shall be the commissioners reserve valuation methods defined in subsections (5), (6) and (10) of this section, three and one-half percent (3 ½%) interest for all other such policies and contracts, except that the rate shall be four and one-half percent (4 ½%) for individual annuity contracts, or in the case of policies and contracts, other than annuity and pure endowment contracts, issued on or after July 1, 1973, four percent (4%) interest for such policies issued prior to July 1, 1977, five and one-half percent (5 ½%) interest for single premium life insurance policies and four and one-half percent (4 ½%) interest for all other such policies issued on or after July 1, 1977, but prior to the operative date of subsection (9)(d) of the standard nonforfeiture law for life insurance as amended, seven percent (7%) interest for such policies issued on and after the operative date of subsection (9)(d) of the standard nonforfeiture law for life insurance as amended, and the following tables:
   1. For ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such policies, the commissioners 1941 standard ordinary mortality table for such policies issued prior to the operative date of subsection (9)(b) of section 41-1927, Idaho Code; the commissioners 1958 standard ordinary mortality table for such policies issued on or after the operative date of subsection (9)(b) of the standard nonforfeiture law for life insurance as amended and prior to the operative date of subsection (9)(d) of the standard nonforfeiture law for life insurance as amended; except, that for any category of such policies issued on female risks, all modified net premiums and present values, referred to in subsections (5) and (10) of this section, may be calculated according to an age not more than six (6) years younger than the actual age of the insured; and for such policies issued on or after the operative date of subsection (9)(d) of the standard nonforfeiture law for life insurance as amended:
      1. The commissioners 1980 standard ordinary mortality table, or
      2. At the election of the company for any one (1) or more specified plans of life insurance, the commissioners 1980 standard ordinary mortality table with ten-year select mortality factors, or
      3. Any ordinary mortality table, adopted after 1980 by the NAIC, which is approved by rule promulgated by the director for use in determining the minimum standard of valuation for such policies.
   2. For all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in such policies, the 1941 standard industrial mortality table for such policies issued prior to the operative date of subsection (9)(c) of section 41-1927, Idaho Code, and for such policies issued on or after such operative date the commissioners 1961 standard industrial mortality table or any industrial mortality table, adopted after 1980 by the NAIC, that is approved by regulation promulgated by the director for use in determining the minimum standard of valuation for such policies.
   3. For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the 1937 standard annuity mortality table or, at the insurer’s option, the annuity mortality table for 1949, ultimate, or any modification of either of these tables approved by the director.
   4. For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the group annuity mortality table for 1951, any modification of such table approved by the director, or, at the insurer’s option, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts.
   5. For total and permanent disability benefits in or supplementary to ordinary policies or contracts, for policies or contracts issued on or after January 1, 1966, the tables of period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 disability study of the Society of Actuaries, with due regard to the type of benefit, or any tables of disablement rates and termination rates, adopted after 1980 by the NAIC, that are approved by regulation promulgated by the director for use in determining the minimum standard of valuation for such policies; for policies or contracts issued on or after the operative date of section 41-1927, Idaho Code, (standard nonforfeiture law) and prior to January 1, 1966, either such tables or, at the insurer’s option, the class (3) disability table (1926). Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies.
   6. For accidental death benefits in or supplementary to policies, for policies issued on or after January 1, 1966, the 1959 accidental death benefits table or any accidental death benefits table, adopted after 1980 by the NAIC, that is approved by regulation promulgated by the director for use in determining the minimum standard of valuation for such policies; for policies issued on or after the operative date of section 41-1927, Idaho Code, (standard nonforfeiture law) and prior to January 1, 1966, either such table or, at the insurer’s option, the intercompany double indemnity mortality table. Either table shall be combined with a mortality table permitted for calculating the reserves for life insurance policies.
   7. For group life insurance, life insurance issued on the substandard basis and other special benefits, such tables as may be approved by the director as being sufficient with relation to the benefits provided by such policies.
4. Except as provided in subsection (4b) of this section, the minimum standard of valuation for all individual annuity and pure endowment contracts issued on or after the operative date of this subsection, as defined herein, and for all annuities and pure endowments purchased on or after such operative date under group annuity and pure endowment contracts, shall be the commissioners reserve valuation methods defined in subsections (5) and (6) of this section and the following tables and interest rates:
   1. For individual annuity and pure endowment contracts issued prior to July 1, 1977, excluding any disability and accidental death benefits in such contracts, the 1971 individual annuity mortality table, or any modification of this table approved by the director, and six percent (6%) interest for single premium immediate annuity contracts, and four and one-half percent (4 ½%) interest for all other individual annuity and pure endowment contracts.
   2. For individual single premium immediate annuity contracts issued on or after July 1, 1977, but prior to January 1, 1982, excluding any disability and accidental death benefits in such contracts, the 1971 individual annuity mortality table, or any modification of this table approved by the director, and seven and one-half percent (7 ½%) interest.
   3. For individual single premium immediate annuity contracts issued on or after January 1, 1982, excluding any disability and accidental death benefits in such contracts, the 1971 individual annuity mortality table or any individual annuity mortality table, adopted after 1980 by the NAIC, that is approved by regulation promulgated by the director for use in determining the minimum standard of valuation for such contracts, or any modification of these tables approved by the director, and eleven percent (11%) interest.
   4. For individual annuity and pure endowment contracts issued on or after July 1, 1977, but prior to January 1, 1982, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in such contracts, the 1971 individual annuity mortality table, or any modification of this table approved by the director, and five and one-half percent (5 ½%) interest for single premium deferred annuity and pure endowment contracts and four and one-half percent (4 ½%) interest for all other such individual annuity and pure endowment contracts.
   5. For individual annuity and pure endowment contracts issued on or after January 1, 1982, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in such contracts, the 1971 individual annuity mortality table or any individual annuity mortality table, adopted after 1980 by the NAIC, that is approved by regulation promulgated by the director for use in determining the minimum standard of valuation for such contracts, or any modification of these tables approved by the director, and eight percent (8%) interest.
   6. For annuities and pure endowments purchased prior to July 1, 1977, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 group annuity mortality table, or any modification of this table approved by the director, and six percent (6%) interest.
   7. For annuities and pure endowments purchased on or after July 1, 1977, but prior to January 1, 1982, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 group annuity mortality table, or any modification of this table approved by the director, and seven and one-half percent (7 ½%) interest.
   8. For annuities and pure endowments purchased on or after January 1, 1982, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 group annuity mortality table or any group annuity mortality table, adopted after 1980 by the NAIC, that is approved by regulation promulgated by the director for use in determining the minimum standard of valuation for such annuities and pure endowments, or any modification of these tables approved by the director, and eleven percent (11%) interest.
5. For any calendar year on or after the effective date of subsection (9)(d) of the standard nonforfeiture law for life insurance in the case of life insurance policies issued on or after such effective date, and for any calendar year on or after January 1, 1982, in the case of:
   1. Individual annuity and pure endowment contracts issued on or after January 1, 1982;
   2. Annuities and pure endowments purchased on or after January 1, 1982, under group annuity and pure endowment contracts; and
   3. The net increase, if any, in any particular calendar year after January 1, 1982, in amounts held under guaranteed interest contracts, the company may elect, for the purpose of determining the minimum standard for valuation, for any category of policy or contract, the calendar year statutory valuation interest rate as defined in this subsection in lieu of the interest rate specified in subsection (4) or (4a) of this section.
   4. d. The net increase, if any, in a particular calendar year after January 1, 1982, in amounts held under guaranteed interest contracts
      1. For life insurance,
      2. For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options,
      3. For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in 2. above, the formula for life insurance stated in 1. above shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of ten (10) years and the formula for single premium immediate annuities stated in 2. above shall apply to annuities and guaranteed interest contracts with guarantee duration of ten (10) years or less,
      4. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in 2. above shall apply,
      5. For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in 2. above shall apply.

After July 1, 1973, any insurer may file with the director a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1979, which shall be the operative date of this subsection for such insurer, provided that an insurer may elect a different operative date for individual annuity and pure endowment contracts from that elected for group annuity and pure endowment contracts. If an insurer makes no such election, the operative date of this subsection for such insurer shall be January 1, 1979.

The provisions of this subsection shall be applicable to: A. The interest rates used in determining the minimum standard for the valuation of:

a. Life insurance policies issued in a particular calendar year, on or after the operative date of subsection (9)(d) of the standard nonforfeiture law for life insurance;

b. Individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1982;

c. Annuities and pure endowments purchased in a particular calendar year on or after January 1, 1982, under group annuity and pure endowment contracts; and

shall be the calendar year statutory valuation interest rates as defined in this subsection.

B. Calendar year statutory valuation interest rates:

a. The calendar year statutory valuation interest rates, I, shall be determined as follows and the results rounded to the nearer one-quarter of one percent (¼ of 1%).

I = .03 + W (R — .03) + W (R — .09);

^{1 2}

2

I = .03 + W (R — .03)

where R is the lesser of R and .09;

¹

R is the greater of R and .09;

²

R is the reference interest rate defined in this subsection and W is the weighting factor defined in this subsection,

b. However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent (½ of 1%), the calendar year statutory valuation interest rate for such life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980 (using the reference interest rate defined for 1979) and shall be determined for each subsequent calendar year regardless of when subsection (9)(d) of the standard nonforfeiture law for life insurance becomes operative. C. Weighting factors

Guarantee

Duration     Weighting

(Years)     Factors

10 or less     .50

More than 10, but not more than 20     .45

More than 20     .35

For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values, or both, which are guaranteed in the original policy;

.80

Guarantee     Weighting Factor

Duration     for Plan Type

(Years)     A   B   C

5 or less     .80   .60   .50

More than 5, but not more

than 10     .75   .60   .50

More than 10, but not more

than 20     .65   .50   .45

More than 20     .45   .35   .35

Plan Type

For annuities and guaranteed

interest contracts valued on

a change in fund basis, the

factors shown in (i) above

increased by:     .15   .25   .05

For annuities and guaranteed

interest contracts valued on

an issue year basis (other

than those with no cash

settlement options) which do

not guarantee interest on considerations received more

than one (1) year after issue

or purchase and for annuities

and guaranteed interest

contracts valued on a change

in fund basis which do not

guarantee interest rates on

considerations received more

than twelve (12) months

beyond the valuation date,

the factors shown in (i) or

derived in (ii) increased by:     .05   .05   .05

Plan Type A: At any time policyholder may withdraw funds only:

Plan Type B: Before expiration of the interest rate guarantee, policyholder may withdraw funds only:

(1) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or

(2) without such adjustment but in installments over five (5) years or more; or

(3) no withdrawal permitted.

At the end of interest rate guarantee, funds may be withdrawn without such adjustment in a single sum or installments over less than five (5) years.

Plan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five (5) years, either:

(1) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer; or

(2) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.

E. Alternative method for determining reference interest rates

a. In the event that Moody’s corporate bond yield average — monthly average corporates is no longer published by Moody’s Investors Service, Inc., or in the event that the NAIC determines that Moody’s corporate bond yield average — monthly average corporates, as published by Moody’s Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate, which is adopted by the NAIC and approved by regulation promulgated by the director, may be substituted.

(6) Commissioners reserve valuation method. (a) Except as otherwise provided in subsections (6) and (10) of this section reserves according to the commissioners reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums, shall be the excess, if any, of the present value, at the date of valuation, of such future guaranteed benefits provided for by such policies, over the then present value of any future modified net premiums therefor. The modified net premiums for any such policy shall be such uniform percentage of the respective contract premiums for such benefits that the present value, at the date of issue of the policy, of all such modified net premiums shall be equal to the sum of the then present value of such benefits provided for by the policy and the excess of (i) over (ii) as follows:

Provided that for any life insurance policy issued on or after January 1, 1986, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the reserve according to the commissioners reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined herein as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than such excess premium shall, except as otherwise provided in subsection (10) of this section, be the greater of the reserve as of such policy anniversary calculated as described in the preceding paragraph and the reserve as of such policy anniversary calculated as described in that paragraph, but with (a) the value defined in subparagraph (i) of that paragraph being reduced by fifteen percent (15%) of the amount of such excess first year premium, (b) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (c) the policy being assumed to mature on such date as an endowment, and (d) the cash surrender value provided on such date being considered as an endowment benefit. In making the above comparison the mortality and interest basis stated in subsections (4) and (4b) of this section shall be used.

(b) Reserves according to the commissioners reserve valuation method for:

shall be calculated by a method consistent with the principles of subsection (5)(a) of this section, except that any extra premiums charged because of impairments or special hazards shall be disregarded in the determination of modified net premiums.

(7) Individual annuity and pure endowment reserves.

(a) This subsection shall apply to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code, as now or hereafter amended.

(b) Reserves according to the commissioners annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in such contracts, shall be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by such contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of such contract, that become payable prior to the end of such respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate, or rates, specified in such contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of such contracts to determine nonforfeiture values.

(8) Minimum aggregate reserves. In no event shall an insurer’s aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after the operative date of section 41-1927, Idaho Code, be less than the aggregate reserves calculated in accordance with the methods set forth in subsections (5), (6), (10) and (11) of this section and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for such policies.

(9) Optional reserve basis.

(a) Reserves for policies and contracts issued prior to the operative date of section 41-1927, Idaho Code, may be calculated, at the option of the insurer, according to any standards which produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by the laws in effect immediately prior to such date.

(b) For any category of policies, contracts or benefits specified in subsections (4), (4a) and (4b) of this section, issued on or after the operative date of section 41-1927, Idaho Code, (the standard nonforfeiture law), reserves may be calculated, at the option of the insurer, according to any standard or standards which produce greater aggregate reserves for such category than those calculated according to the minimum standard herein provided, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, shall not be greater than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided for in the policies or contracts.

Provided that for any life insurance policy issued on or after January 1, 1986, for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the foregoing provisions of this subsection shall be applied as if the method actually used in calculating the reserve for such policy were the method described in subsection (5) of this section, ignoring the second paragraph of subsection (5) of this section. The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance with subsection (5) of this section, including the second paragraph of that subsection, and the minimum reserve calculated in accordance with this subsection.

as determined by rules promulgated by the director.

1. A memorandum, in form and substance acceptable to the director as specified by rule, shall be prepared to support each actuarial opinion.

1. The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after December 31, 1995.

2. The opinion shall apply to all business in force including individual and group health insurance plans, in form and substance acceptable to the director as specified by rule.

1. A memorandum, in form and substance as specified in the valuation manual, and acceptable to the director, shall be prepared to support each actuarial opinion.

2. If the insurance company fails to provide a supporting memorandum at the request of the director within a period specified in the valuation manual or the director determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable to the director, the director may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the director.

1. The opinion shall be in form and substance as specified in the valuation manual and acceptable to the director.

2. The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after the operative date of the valuation manual.

3. The opinion shall apply to all policies and contracts subject to subparagraph (ii) of this paragraph, plus other actuarial liabilities as may be specified in the valuation manual.

6. Except in cases of fraud or willful misconduct, the appointed actuary shall not be liable for damages to any person, other than the insurance company and the director, for any act, error, omission, decision or conduct with respect to the appointed actuary’s opinion.

7. Disciplinary action by the director against the company or the qualified actuary shall be defined by rule by the director.

The director may confirm the operative date of the valuation manual by bulletin or otherwise.

1. Requirements for the format of reports to the director under subsection (15)(b)(iii) of this section and which shall include information necessary to determine if the valuation is appropriate and in compliance with this section;

2. Assumptions shall be prescribed for risks over which the company does not have significant control or influence.

3. Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures;

1. Be consistent with the minimum standard of valuation prior to the operative date of the valuation manual; or

2. Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring.

2. In the case of confidential information specified in paragraph (a)(i) and (iv) of this subsection only, with the actuarial board for counseling and discipline or its successor upon request stating that the confidential information is required for the purpose of professional disciplinary proceedings and with state, federal and international law enforcement officials.

In the case of paragraph (b)(iii)1. and 2. of this subsection, provided that such recipient agrees, and has the legal authority to agree, to maintain the confidentiality and privileged status of such documents, materials, data and other information in the same manner and to the same extent as required for the director.

(18) Single state examination:

(a) The director may exempt specific product forms or product lines of a domestic company that is licensed and doing business only in Idaho from the requirements of subsection (14) of this section provided: (i) The director has issued an exemption in writing to the company and has not subsequently revoked the exemption in writing; and

(b) For any company granted an exemption under this section, subsections (4), (4a), (4b), (5), (6), (7), (8), (9), (10), (11), (12) and (13) of this section shall be applicable. With respect to any company applying this exemption, any reference to subsection (14) found in subsections (4), (4a), (4b), (5), (6), (7), (8), (9), (10), (11), (12) and (13) of this section shall not be applicable.

§ 41-613. Valuation of bonds.

1. All bonds or other evidences of debt having a fixed term and rate of interest held by an insurer may, if amply secured and not in default as to principal or interest, be valued as follows:
   1. If purchased at par, at the par value.
   2. If purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made, or in lieu of such method, according to such generally accepted method of valuation elected by the insurer and approved by the director.
   3. Purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase, plus actual brokerage, transfer, postage or express charges paid in the acquisition of such securities.
   4. Unless otherwise provided by valuation established or approved by the director, no such security shall be carried at above the call price for the entire issue during any period within which the security may be so called.
2. The director shall have full discretion in determining the method of calculating values according to the rules set forth in this section, but no such method or valuation shall be inconsistent with any applicable valuation method used by insurers in general, or any such method then currently formulated or approved by the national association of insurance commissioners or its successor organization.

§ 41-614. Valuation of other securities.

1. Securities, other than those referred to in section 41-613, Idaho Code, held by an insurer may be valued, in the discretion of the director:
   1. At their market value if market value can be reasonably ascertained, or
   2. If the issuer is an insurer, at their unadjusted book value as determined by the issuer’s convention form financial statement filed with insurance public supervisory officials, or
   3. Any other value which the insurer can substantiate to the satisfaction of the director. In addition to other applicable bases of valuation, the director shall give due consideration to valuation based upon:
      1. The net worth of the issuer as shown by financial statements acceptable to the director.
      2. The acquisition cost of the security to the insurer, adjusted in accordance with generally accepted accounting principles to reflect changes since such acquisition in the issuer’s financial condition and business.
2. Preferred or guaranteed stocks or shares while paying full dividends may be carried at a fixed value in lieu of market value, according to a generally accepted method of computation approved by the director.
3. Stock of a subsidiary corporation of an insurer shall not be valued at an amount in excess of the net value thereof as based upon those assets only of the subsidiary which would be eligible under chapter 7, title 41, Idaho Code, for investment of the funds of the insurer directly.
4. No valuations under this section shall be inconsistent with any applicable valuation or method then currently formulated or approved by the national association of insurance commissioners or its successor organization.

§ 41-615. Valuation of property.

1. Real property acquired pursuant to a mortgage loan or contract for sale, in the absence of a recent appraisal deemed by the director to be reliable, shall not be valued at an amount greater than the unpaid principal of the defaulted loan or contract at the date of such acquisition, together with any taxes and expenses paid or incurred in connection with such acquisition, and the cost of improvements thereafter made by the insurer and any amounts thereafter paid by the insurer on assessments levied for improvements in connection with the property.
2. Other real property held by an insurer shall not be valued at an amount in excess of fair value as determined by recent appraisal. If valuation is based on an appraisal more than three years old, the director may at his discretion call for and require a new appraisal in order to determine fair value.

§ 41-616. Valuation of purchase money mortgages.

Purchase money mortgages on real property referred to in subsection (1) of section 41-615[, Idaho Code] of this chapter shall be valued in an amount not exceeding the acquisition cost of the real property covered thereby or ninety per cent (90%) of the fair value of such real property, whichever is less.

§ 41-701. Investments.

1. Funds of a domestic insurer shall be invested, reinvested and used in the manner and subject to the conditions, restrictions and limitations set forth in this chapter.
2. Investments of a foreign or alien insurer which would be authorized for a like domestic insurer shall be allowed as assets in any determination of its financial condition. Other investments of a foreign or alien insurer which are authorized by the laws of its domicile may be so allowed at the discretion of the director.
3. The director may adopt rules establishing standards and limitations for investments by insurers that are not otherwise specifically permitted or prohibited in this chapter. In the absence of a rule prohibiting such, all assets shall be valued according to rules promulgated by the national association of insurance commissioners (NAIC), NAIC’s valuation of securities office or by NAIC’s financial condition subcommittee.

§ 41-702. Eligible investments.

1. Insurers shall invest in or lend their funds on the security of, and shall hold as invested assets, only cash and eligible investments as prescribed in this chapter.
2. Any particular investment held by an insurer on the effective date of this code, and which was a legal investment at the time it was made, and which the insurer was legally entitled to possess immediately prior to such effective date, shall be deemed to be an eligible investment.
3. Eligibility of an investment shall be determined as of the date of its making or acquisition, except as stated in subsection (2) above.
4. Any investment limitation based upon the amount of the insurer’s assets or particular funds shall relate to such assets or funds as shown by the insurer’s annual statement as of the December 31 next preceding date of making or acquisition of the investment by the insurer, or as shown by a current financial statement.

§ 41-703. General qualifications.

1. No security or investment (other than real and personal property acquired under section 41-728, Idaho Code, real property owned) shall be eligible for acquisition unless it is interest bearing or interest accruing or by its character entitled to receive dividends or income when declared or paid, including discounted and zero interest certificates of accrual on public and corporate obligations, is not then in default in any respect, and the insurer is entitled to receive for its exclusive account and benefit the interest or income accruing thereon.
2. No security or investment shall be eligible for purchase at a price above its market value.
3. No provision of this chapter shall prohibit the acquisition by an insurer of other or additional securities or property if received as a dividend or as a lawful distribution of assets, or under a lawful and bona fide agreement of bulk reinsurance, merger, or consolidation. Any investment so acquired which is not otherwise eligible under this chapter shall be disposed of pursuant to section 41-730, Idaho Code, if personal property or securities, or pursuant to section 41-729, Idaho Code, if real property.

§ 41-704. Authorization of investments.

An insurer shall not make, sell, or exchange any investment or loan, except as to the policy loans or annuity contract loans of a life insurer, unless the same is authorized or approved by its board of directors or by a committee charged by the board of directors or the by-laws with the duty of making such investment, loan, sale or exchange. The minutes of any such committee shall be recorded and reports thereof shall be submitted to the board of directors for approval or disapproval.

§ 41-705. Record of investments.

1. The insurer shall make a written record in permanent form showing the authorization as to each investment or loan of its funds, which record shall be signed by an officer of the insurer or by the chairman of the committee authorizing or approving the investment or loan.
2. As to each such investment or loan, the insurer’s record shall contain:
   1. In the case of loans: The name of the borrower; the location of the property; a physical description and the appraised value of the security; the amount of the loan, rate of interest and terms of repayment.
   2. In the case of securities: The name of the obligor; a description of the security; the amount invested, the rate of interest or dividend, the maturity and yield based upon the purchase price.
   3. In the case of real estate: The location and legal description of the property; a physical description and the appraised value; the purchase price and terms.
   4. In the case of all investments:
      1. The amount of expenses and commissions directly incurred on account of any investment or loan and by whom and to whom payable if not covered by contracts with mortgage loan representatives or correspondents which are part of the insurer’s records.
      2. The name of any officer or director of the insurer with an interest in the investment and the nature of the interest. For purposes of this subparagraph, an officer or a director of an insurer has an interest in an investment if:
         1. The insurer acquires or sells the investment directly or indirectly from or to the officer or director; or
         2. The officer or director holds a direct, an indirect, or a contingent interest in the securities or loan representing the investment or in the assets of the person in whose behalf the investment or loan is made.

This paragraph shall not apply to an investment by an officer or a director in common stock, preferred stock, or bonds of a United States publicly traded corporation if the director or officer’s interest in such publicly traded corporation constitutes less than one percent (1%) of the corporation’s total outstanding stock or bonds, in exchange-traded common stock funds or bond funds if listed on a United States regulated exchange, or in mutual funds registered with the securities and exchange commission.

§ 41-706. Diversification of investments.

An insurer shall invest in or hold as assets categories of investments within applicable limits as follows only:

1. One (1) person. An insurer shall not, except with the consent of the director, have at any one (1) time any combination of investments in or loans upon the security of the obligations, property, or securities of any one (1) person, institution, corporation, or municipal corporation, aggregating an amount exceeding ten percent (10%) of the insurer’s assets. This restriction shall not apply as to investments or deposits fully insured by the federal deposit insurance corporation or to general obligations of the United States of America or of any state or include policy or annuity contract loans made under section 41-718, Idaho Code, or to assets subject to section 41-715 or 41-3803, Idaho Code, or to any one (1) domestic reciprocal insurer which exclusively insures members who are political subdivisions, as defined by section 6-902 2., Idaho Code, provided that all such investments comply with the public depository laws.
2. Voting stock. An insurer shall not invest in or hold at any one (1) time more than ten percent (10%) of the outstanding voting stock of any corporation, except with the consent of the director given with respect to voting rights of preference stock during default of dividends. This provision does not apply as to stock of subsidiaries of the insurer or a companion company or companies under substantially the same management at the time of purchase, as referred to in section 41-715 or 41-3803, Idaho Code.
3. Minimum capital. An insurer (other than title insurer) shall invest and maintain invested funds not less in amount than the minimum paid-in capital stock required under this code of a domestic stock insurer transacting like kinds of insurance, only in cash and the securities provided for under the following sections of this chapter: section 41-707, Idaho Code, (public obligations), and section 41-721, Idaho Code, (real estate mortgages and contracts).
4. Life insurance reserves. A life insurer shall also invest and keep invested its funds in an amount not less than the reserves under its life insurance policies and annuity contracts in force, as prescribed by section 41-612, Idaho Code, in cash and/or the securities or investments allowed under this chapter, other than in common stocks, insurance stocks and stocks of subsidiaries of the insurer.
5. Other specific limits. Limits as to investments in the category of real estate shall be as provided in section 41-728, Idaho Code; and other specific limits shall apply as stated in the sections dealing with other respective kinds of investments.

§ 41-707. Public obligations.

An insurer may invest any of its funds in bonds or other evidences of debt, not in default as to principal or interest, which are valid and legally authorized obligations issued, assumed or guaranteed by the United States or by any state thereof or by any territory or possession of the United States or by the District of Columbia, or of the government of Canada or any provinces thereof, or by any county, city, town, village, municipality or district therein or by any political subdivision thereof or by any civil division or public instrumentality of one or more of the foregoing, if, by statutory or other legal requirements applicable thereto, such obligations are payable, as to both principal and interest, (1) from taxes levied or required to be levied upon all taxable property or all taxable income within the jurisdiction of such governmental unit or, (2) from adequate special revenues pledged or otherwise appropriated or by law required to be provided for the purpose of such payment, but not including any obligation payable solely out of special assessments on properties benefited by local improvements unless adequate security is evidenced by the ratio of assessment to the value of the property or the obligation is additionally secured by an adequate guaranty fund required by law.

§ 41-708. Obligations and stock of certain federal agencies.

An insurer may invest in the obligations, and/or stock where stated, of the following agencies of the government of the United States of America, whether or not such obligations are guaranteed by such government:

1. Commodity credit corporation.
2. Federal intermediate credit banks.
3. Federal land banks.
4. Central bank for cooperatives.
5. Federal home loan banks, and stock thereof.
6. Federal national mortgage association, and stock thereof when acquired in connection with sale of mortgage loans to such association.
7. Any other similar agency of the government of the United States of America and of similar financial quality.

§ 41-709. Irrigation district bonds.

An insurer may invest in the legally issued bonds, not delinquent as to principal or interest, of any solvent irrigation district created as provided by law in this state, or in any other state, whose water rights shall have been legally acquired and finally determined, and shall be fully adequate to supply sufficient water to properly irrigate all the land within such district, and which shall be adequately irrigating not less than thirty per cent (30%) of the lands within such irrigation district.

§ 41-710. International bank.

An insurer may invest in obligations issued, assumed or guaranteed by the International Bank for Reconstruction and Development or the African Development Bank.

§ 41-711. Corporate obligations.

An insurer may invest any of its funds in obligations other than those eligible for investment under section 41-721, Idaho Code, (mortgage loans and contracts), if they are issued, assumed, or guaranteed by any solvent institution created or existing under the laws of the United States or of any state, district or territory thereof, or of the government of Canada or any province thereof, and if said institution is not in default as to principal or interest on any of its obligations.

§ 41-712. Certain terms defined.

1. Certain terms used are defined for the purposes of this chapter as follows:
   1. “Obligation” includes bonds, debentures, notes or other evidences of indebtedness.
   2. “Institution” includes corporations, joint-stock associations, and business trusts.

§ 41-713. Preferred stocks — Diversification.

An insurer may invest any of its funds, in an aggregate amount not exceeding fifteen percent (15%) of its assets in preferred stocks or shares, other than common stocks, of solvent institutions existing under the laws of the United States or of any state, district, or territory thereof, or of the government of Canada or any province thereof, if all of the prior obligations and prior preferred stocks, if any, of such institution at the date of acquisition by the insurer are not then in default as to principal, interest or dividends.

§ 41-714. Common stocks.

After satisfying the requirements of section 41-706(3) and (4), Idaho Code, (investment of capital and life reserves), an insurer may invest funds in an aggregate amount not in excess of fifteen percent (15%) of its assets in common shares of stock of any solvent institution existing under the laws of the United States or of any state, district or territory thereof, or of the government of Canada or any province thereof, that qualify as a sound investment, in addition to the shares of a substantially owned or wholly owned subsidiary corporation.

For the purpose of determining the investment limitation imposed by this section, the insurer shall value securities subject to the provisions of this section at the cost of the security or at the market value of the security, whichever is lower. However, investments in the shares of subsidiaries or companion insurance companies shall be governed by sections 41-715 and 41-3803, Idaho Code.

The limitations as to investment in common stocks as provided herein shall not apply to nor limit the right of investments in investment trust securities as provided for in section 41-716, Idaho Code.

§ 41-715. Insurance stocks.

1. An insurer may invest in subsidiary and/or companion insurance companies not to exceed fifteen percent (15%) of assets. For the purpose of calculating this fifteen percent (15%) limitation, all investments made under this section and section 41-3803, Idaho Code, must be valued at market value of the security if actively traded, or at cost if not actively traded.
2. The limitations on investments in insurance stocks set forth in this section shall not apply to stocks acquired under a plan for merger of the insurers which has been approved by the director or as to shares received as stock dividends upon shares already owned.
3. Shares acquired and held under this section shall not, for the purposes of the limitations provided under section 41-714, Idaho Code, be included among other common stocks held by the insurer.

§ 41-716. Investment trust securities.

1. An insurer may invest in the securities of any open-end management type investment company or investment trust registered with the federal securities and exchange commission under the investment company act of 1940 as from time to time amended, if such investment company or trust has been organized for not less than three (3) years and has assets of not less than twenty-five million dollars ($25,000,000) as at the date of investment by the insurer. The aggregate amount invested under this section shall not exceed twenty-five percent (25%) of the insurer’s assets with limitations of five percent (5%) of the insurer’s assets in any one (1) fund and ten percent (10%) of the insurer’s assets in any one (1) fund family.
2. For the purpose of determining the investment limitation imposed by this section, the insurer shall value securities subject to the provisions of this section at the cost of the security or at the market value of the security, whichever is lower.

§ 41-717. Equipment trust obligations.

An insurer may invest any of its funds, in an aggregate amount not exceeding ten per cent (10%) of its assets, in equipment trust obligations or certificates which are adequately secured or in other adequately secured instruments evidencing an interest in transportation equipment wholly or in part within the United States and the right to receive determined portions of rental, purchase or other fixed obligatory payments for the use or purchase of such transportation equipment.

§ 41-718. Policy loans.

A life insurer may lend to its policy holder upon pledge of the policy as collateral security, any sum not exceeding the cash surrender value of the policy; or may lend against pledge or assignment of any of its supplementary contracts or other contracts or obligations, so long as the loan is adequately secured by such pledge or assignment. Loans so made are eligible investments of the insurer.

§ 41-719. Collateral loans.

An insurer may lend and thereby invest its funds upon the pledge of securities eligible for investment under this chapter. As at date made, no such loan shall exceed in amount ninety per cent (90%) of the market value of such collateral pledged. The amount so loaned shall be included pro rata in determining the maximum percentage of funds permitted under this chapter to be invested in the respective categories of securities so pledged.

§ 41-720. Savings and share accounts.

An insurer may invest or deposit any of its funds in time certificates or share or savings accounts of banks, savings and loan associations and credit unions; provided, however, that funds may be deposited in any one (1) such savings and loan association or credit union only to the extent that such an account is insured by either the federal savings and loan insurance corporation or the national credit union [share] insurance fund.

§ 41-721. Mortgage loans and contracts.

An insurer may invest any of its funds in:

1. Bonds or evidences of debt which are secured by first mortgages or deeds of trust on improved unencumbered real property located in the United States.
2. Purchase money mortgages or like securities received by it upon the sale or exchange of real property acquired pursuant to section 41-728, Idaho Code.
3. Bonds or notes secured by mortgage or trust deed guaranteed or insured by the federal housing administration under the terms of an act of congress of the United States for June twenty-seventh, nineteen hundred thirty-four, entitled the “National Housing Act,” as amended.
4. Bonds or notes secured by mortgage or trust deed guaranteed or insured as to principal in whole or in part by the administrator of veterans affairs pursuant to the provisions of title III of an act of congress of the United States of June twenty-second, nineteen hundred forty-four, entitled the “Servicemen’s Readjustment Act of 1944,” as amended, or by any other similar agency of the government of the United States.
5. Evidences of debt secured by first mortgages or deeds of trust upon leasehold estates, running for a term of not less than fifteen (15) years beyond the maturity of the loan as made or as extended, in improved real property, otherwise unencumbered, and if the mortgagee is entitled to be subrogated to all the rights under the leasehold.
6. Bonds or notes secured by mortgage and insured by mortgage guarantee insurance as provided by chapter 26A, title 41, Idaho Code.
7. Participation interests in any bond, note or evidence of indebtedness if the entire indebtedness would qualify as an investment under subsections (1) through (6) of this section, and:
   1. Such participation is senior and gives the holder substantially the rights of a first mortgagee; or
   2. Such participation is of equal priority, to the extent of such interest, with other interests therein.

§ 41-722. Mortgage loan limited by property value.

1. No commercial or residential mortgage loan or investment therein upon any one (1) parcel of real property shall exceed in amount, at the time of acquisition, eighty percent (80%) of the fair value of the property and the loan is required to be amortized within not more than thirty (30) years by payment of installments of principal and interest thereon at regular intervals not less frequent than every year.
2. The extent to which a mortgage loan made under subsection (3) or (4) of section 41-721, Idaho Code, is guaranteed by the administrator [secretary] of veterans affairs may be deducted before application of the limitations contained in subsection (1) of this section.

§ 41-723. Appraisal — Limit of amount loaned.

1. The fair value of property shall be determined by appraisal by a competent independent appraiser at the time of the making or acquisition of a mortgage loan or investing in a contract for the deed thereon; except, that as to bonds or notes secured by mortgage or trust deed guaranteed or insured by the federal housing administration, or guaranteed or insured as to principal in full or in part by the administrator [secretary] of veterans affairs, or guaranteed or insured by the farmers home administration, the valuation made by such administration or administrator shall be deemed to have been made by a competent appraiser for the purposes of this subsection.
2. An insurer shall not make or acquire a loan or loans upon the security of any one (1) parcel of real property in aggregate amount in excess of ten thousand dollars ($10,000) or more than the amount permissible under section 41-706(1), Idaho Code, (investment in securities, etc., of any one person), whichever is the greater.

§ 41-724. “Improved real property” defined.

For the purpose of section 41-724 [41-721], Idaho Code, “improved real property” means:

1. Farmland used for tillage, crop or pasture;
2. Real estate on which improvements, or improvements under construction or in process of construction, suitable for residence, institutional, commercial or industrial use, are situated; and
3. Real estate to be developed for the use or uses set forth in subsection (2) of this section on which durable structural improvements, or durable structural improvements under construction or in process of construction, including but not limited to streets, sidewalks, sewers, and utilities which will become an integral part of such development, are situated or abut.

§ 41-725. “Encumbrance” defined.

1. Real property shall not be deemed to be encumbered within the meaning of section 41-721[, Idaho Code,] by reason of the existence of instruments reserving mineral, oil, timber or similar rights, rights of way, sewer rights, rights in walls, nor by reason of any liens for taxes or assessments not yet due, or on account of liens not delinquent for community recreational facilities, or for the maintenance of community facilities, nor by reason of building restrictions or other restrictive covenants common to the community in which the property is located, nor by liens for service and maintenance of water rights where not delinquent, nor when such real property is subject to lease under which rents or profits are reserved to the owner if in any event the security for the loan or investment is a first lien upon the real property.
2. If under any of the exceptions set forth in subsection (1) of this section there is any sum owing but not due or delinquent, the total amount of such sum shall be deducted from the amount which otherwise might be loaned on the property. The value of any mineral, oil, timber or similar right reserved shall not be included in the fair value of the property.

§ 41-726. Special investments by title insurer.

1. In addition to other investments eligible under this chapter, a title insurer may invest in its abstract plant and equipment, and in loans secured by mortgages on abstract plants and equipment, which plant investment shall not exceed fifty per cent (50%) of its paid-in capital stock and paid-in surplus unless a greater amount is approved in advance by the director. Except with the director’s consent, the insurer shall not invest or have invested in stocks of subsidiaries and other corporate stocks an amount in excess of the insurer’s surplus funds exclusive of its paid-in capital stock.
2. In any determination of the insurer’s financial condition no investment in abstract plant and equipment, or in loans secured by mortgages thereon, shall be valued at an amount in excess of the lesser of (a) the cost thereof to the insurer, or (b) the fair market value.
3. No investment as determined in subparagraph (2) above shall be credited against the insurer’s unearned premium or loss reserves required under section 41-611, Idaho Code.

§ 41-727. Foreign securities.

1. Notwithstanding the definitions in chapter 1, title 41, Idaho Code, for purposes of this section, the following definitions shall apply:
   1. “Business entity” means a sole proprietorship, corporation, limited liability company, association, partnership, joint stock company, joint venture, mutual fund, trust, joint tenancy or other similar form of business organization, whether organized for-profit or not-for-profit.
   2. “Domestic jurisdiction” means the United States, Canada, and a state or political subdivision of the United States or Canada.
   3. “Foreign currency” means a currency other than that of the United States or Canada.
   4. “Foreign investment” means an investment in a foreign jurisdiction or in an asset domiciled in a foreign jurisdiction. An investment shall not be deemed to be foreign if the issuing business entity, qualified primary credit source or qualified guarantor is a domestic jurisdiction or a business entity domiciled in a domestic jurisdiction, unless:
      1. The issuing business entity is a shell business entity; and
      2. The investment is not assumed, accepted, guaranteed or insured or otherwise backed by a domestic jurisdiction or a business entity that is not a shell business entity domiciled in a domestic jurisdiction.
   5. “Foreign jurisdiction” means a jurisdiction outside of the United States or Canada.
   6. “Qualified guarantor” means a guarantor against which an insurer has a direct claim for full and timely payment evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction.
   7. “Qualified primary credit source” means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction.
   8. “Shell business entity” means a business entity having no economic substance except as a vehicle for owning interests in assets issued, owned or previously owned by a business entity domiciled in a foreign jurisdiction.
   9. “SVO” means the securities valuation office of the national association of insurance commissioners or any successor office established by the national association of insurance commissioners.
2. Any insurance company organized under any law of this state may invest, by loans or otherwise, any of its funds, or any part thereof, in foreign investments of the same types as those that an insurer is permitted to acquire under sections 41-707, 41-708, 41-711, 41-713, 41-714, 41-716 and 41-721(1), Idaho Code, if:
   1. The aggregate amount of foreign investments then held by the insurer does not exceed fifteen percent (15%) of its admitted assets; and
   2. The aggregate amount of foreign investments then held by the insurer in a single foreign jurisdiction does not exceed ten percent (10%) of its admitted assets for jurisdictions that have a sovereign debt rating of SVO 1, or three percent (3%) of its admitted assets for all other jurisdictions.
3. Any insurance company organized under any law of this state may invest, by loans or otherwise, any of its funds, or any part thereof, in investments of the same types as those that an insurer is permitted to acquire under sections 41-707, 41-708, 41-711, 41-713, 41-714, 41-716 and 41-721(1), Idaho Code, which are denominated in foreign currencies, whether or not they are foreign investments acquired under subsection (2) of this section, if: (a) The aggregate amount of investments then held by the insurer denominated in foreign currencies does not exceed ten percent (10%) of its admitted assets; and
4. The investment limitations in subsections (2) and (3) of this section computed on the basis of an insurer’s admitted assets shall relate to the amount as shown on the insurer’s last annual report as filed with the commissioner of insurance or a more recent quarterly financial statement as filed with the commissioner, on a form prescribed by the national association of insurance commissioners, within forty-five (45) days following the end of the calendar quarter to which the interim statement pertains.
5. Investments acquired under this section shall be aggregated with investments of the same types made under sections 41-707, 41-708, 41-711, 41-713, 41-714, 41-716 and 41-721(1), Idaho Code, and in a similar manner, for purposes of determining compliance with the limits, if any, contained in this chapter.

(b) The aggregate amount of investments then held by the insurer denominated in the foreign currency of a single foreign jurisdiction does not exceed five percent (5%) of its admitted assets for jurisdictions that have a sovereign debt rating of SVO 1, or three percent (3%) of its admitted assets for all other jurisdictions.

§ 41-728. Real estate.

1. An insurer may acquire, invest in, own, maintain, alter, furnish, improve, manage, lease and convey the following real estate only:
   1. Land and buildings used for home office purposes, including contiguous parcels intended for future home office or corporate campus expansion, together with such other real estate as is required for its accommodation in the convenient transaction of its business.
   2. Real estate acquired in satisfaction in full or in part of or through foreclosure of or judgment obtained upon, loans, mortgages, liens or other evidences of indebtedness previously owing to the insurer in the regular course of its business.
   3. Real estate acquired in part payment of the consideration in the sale of other real estate owned by the insurer.
   4. Real estate acquired by gift or devise.
   5. Real estate acquired through a lawful merger or consolidation of another insurer and not required for its accommodation as provided in paragraph (a) of this subsection.
   6. Real estate for the production of income, under lease, or being constructed under a definite agreement providing for lease, to solvent institutions for commercial or industrial purposes, other than primarily for agricultural, horticultural, ranch, mining, mineral, oil, recreational, amusement, club, motel, or hotel purposes.
   7. Real estate subject to a plan of development other than primarily for agricultural, horticultural, ranch, mining, mineral, oil, recreational, amusement, club, motel, or hotel purposes as limited by subsection (2)(c) of this section.
2. The aggregate amount so invested by the insurer shall not exceed:
   1. If for home office and its other purposes pursuant to subsection (1)(a) of this section, fifteen percent (15%) of the insurer’s assets, subject to the right of the director to approve an additional amount after hearing and for good cause shown.
   2. If for income purposes pursuant to subsection (1)(f) of this section, ten percent (10%) of the insurer’s admitted assets.
   3. If for properties subject to a plan of development pursuant to subsection (1)(g) of this section, not more than five percent (5%) of its admitted assets of which not more than two percent (2%) of its admitted assets may be in any one (1) parcel or group of contiguous parcels. The director may disapprove the property as an admitted asset if the plan of development is not being pursued in good faith. Factors for review may include, but are not limited to, progress with regard to zoning, roads, utilities, plats and completed development by the insurer of properties.
   4. In all categories and for all purposes, not to exceed twenty percent (20%) of the insurer’s assets.
3. An insurer may lease to others part of real property otherwise occupied by it for home office and other purposes under subsection (1)(a) of this section, but the value of the entire property must be included for the purposes of the limitation upon aggregate real estate investments provided in subsection (2)(a) of this section.

§ 41-729. Time limit for disposal of real estate.

1. Except as provided in subsection (4) below, an insurer shall dispose of real estate within time limits as follows:
   1. If acquired under section 41-728(1)(a)[, Idaho Code] (home office and branch office property), the insurer shall sell and dispose of the property within five (5) years after it ceased to be used or to be necessary for the purposes stated therein.
   2. If acquired under subdivisions (b) (in satisfaction of debts, etc.), (c) (in part payment on other real estate sold), (d) (by gift or devise), or (e) (merger or consolidation) of section 41-728(1)[, Idaho Code], the insurer shall sell and dispose of the property within five (5) years after the insurer acquired title thereto.
   3. If acquired under section 41-728(1)(f)[, Idaho Code] (for production of income), the insurer shall within five (5) years after the termination or expiration of the lease, sell and dispose of the property, or re-lease the property for an additional term under the same conditions provided in such section as for an original leasing.
2. Any real estate otherwise subject to disposal under subdivisions (b) or (c) above, may be retained by the insurer for home office or branch office purposes for so long as so used, and subject to provisions otherwise applicable to such home office and branch office property.
3. Any real property otherwise subject to disposal under subdivisions (a) and (b) above, may be retained by the insurer for leasing under section 41-728(1)(f)[, Idaho Code,] for so long as so used, and subject to provisions otherwise applicable to such real estate for leasing.
4. Upon proof satisfactory to him that the interests of the insurer will suffer materially by the forced sale thereof, the commissioner may by certificate grant a reasonable additional period, as specified in the certificate, within which the insurer shall dispose of any particular parcel of real estate.
5. Real estate held by an insurer beyond the period allowed for its disposal under this section shall not constitute an asset of the insurer in any determination of the insurer’s financial condition.

§ 41-730. Disposal of ineligible property and securities.

1. Any personal property or securities lawfully acquired by an insurer which it could not otherwise have invested in or loaned its funds upon at the time of such acquisition, shall be disposed of by the insurer within one (1) year from date of acquisition, unless within such period the security has attained to the standard for eligibility. The director, upon application and proof that forced sale of any such property or security would be against the best interests of the insurer, may extend the disposal period for an additional reasonable time.
2. While any such property or security remains so ineligible it shall not be allowed as an asset of the insurer.
3. Any ineligible property or security unlawfully acquired by an insurer shall be disposed of forthwith, and for failure so to do within thirty (30) days after order of the director requiring such disposal, the director may suspend or revoke the insurer’s certificate of authority.
4. For the purposes of subsection (3) above, an investment otherwise eligible shall not be deemed ineligible for the reason that it is in excess of the amount permitted under this chapter to be invested in the category of investments to which it belongs; and any such excess investment shall be disposed of within the time prescribed in subsection (1) of this section.

§ 41-731. Prohibited investments and investment underwriting.

1. In addition to investments excluded under other provisions of this code, an insurer shall not directly or indirectly invest in or loan its funds upon the security of:
   1. Issued shares of its own capital stock, except for the purpose of mutualization under section 41-2854, Idaho Code, or in connection with a plan approved by the director for purchase of such shares by the insurer’s officers, employees, or agents, or for other reasonable purposes under a plan filed with and approved by the director. No such stock shall, however, constitute an asset of the insurer in any determination of its financial condition.
   2. Except with the director’s consent, any security issued by any corporation or enterprise the controlling interest of which is, or will after such acquisition by the insurer be, held directly or indirectly by the insurer or any combination of the insurer and the insurer’s directors, officers, parent corporation, subsidiaries, controlling stockholders, and the spouses and children of any of the foregoing individuals. Investments in subsidiaries under sections 41-706(2), 41-715 and 41-3803, Idaho Code, shall not be subject to this provision.
   3. Any note or other evidence of indebtedness of any director, officer, or controlling stockholder of the insurer, or the spouse or child of any of the foregoing individuals, except as to policy loans authorized under section 41-718, Idaho Code.
   4. Any investment or security which is found by the director to be designed to evade any prohibition of this chapter.
2. No insurer shall underwrite or participate in the underwriting of an offering of securities or property by any other person.

§ 41-732. Domestic reciprocal insurer.

Notwithstanding the provisions of chapter 1, title 57, Idaho Code, and section 67-2328, Idaho Code, funds of a domestic reciprocal insurer which is comprised of and exclusively insures members who are political subdivisions of the state, as defined in section 6-902(2), Idaho Code, and which exclusively insures against risk pertaining to property and casualty claims, shall be invested, reinvested and used in the manner and subject to the conditions, restrictions and limitations set forth in this chapter.

§ 41-733. Subsidiary investments.

An insurer may invest in subsidiaries in accordance with section 41-3803, Idaho Code.

§ 41-734. Separate account funds.

1. The amounts allocated to each separate account established by the insurer pursuant to any provision of the Idaho Insurance Code (separate accounts), together with accumulations thereon may be invested and reinvested in any class of investments which may be authorized in the written contract or agreement without regard to any requirements or limitations prescribed by this chapter. The investments in such separate account or accounts shall not be taken into account in applying the investment limitations applicable to other investments of the insurer.
2. Except with the approval of the director and under such conditions as to investments and other matters as he may prescribe, which shall recognize the guaranteed nature of the benefits provided, reserves for (a) benefits guaranteed as to dollar amount and duration and (b) funds guaranteed as to principal amount or stated rate of interest shall not be maintained in a separate account.

§ 41-735. Miscellaneous investments.

1. An insurer may loan or invest its funds in kinds of loans or investments not otherwise specifically made eligible for investment and not specifically prohibited or made ineligible by this or other provisions of the Idaho Code in an aggregate amount not exceeding the lesser of ten percent (10%) of an insurer’s assets, or seventy-five percent (75%) of an insurer’s capital and surplus excluding surplus notes. Investments under this subsection are limited to five percent (5%) of an insurer’s assets in a single investment or in a single entity, its affiliates, and subsidiaries as defined by the first six (6) digits of the committee on uniform security identification procedures (CUSIP) number.
2. The insurer shall keep a separate record of all investments acquired under this section.

§ 41-736. Permitted investments.

Subject to other limitation in chapter 7, title 41, Idaho Code, an insurer shall not invest or have invested at any one time more than sixty-five percent (65%) of its assets in investments described in sections 41-721 and 41-728, Idaho Code. Any insurer which, on July 1, 2003, has in excess of sixty-five percent (65%) of its assets so invested shall not make any further such investments while the excess exists. The limitations prescribed in this section shall not apply to mortgage-backed securities rated one or two by the securities valuation office (SVO) of the national association of insurance commissioners or to mortgage-backed securities which qualify as provisionally exempt from filing with the SVO.

§ 41-801. Authorized deposits of insurers.

The following deposits of insurers when made through the director shall be accepted and held, and shall be subject to the applicable provisions of this chapter:

1. Deposits required under this code for authority to transact insurance in this state.
2. Deposits of domestic insurers when made pursuant to the laws of other states, provinces and countries as requirement for authority to transact insurance in such state, province or country.
3. Deposits in such additional amounts as are permitted to be made under section 41-808[, Idaho Code,] (excess deposits).

§ 41-802. Purpose of deposit.

Such deposits shall be held for purposes as follows:

1. Deposits made in this state under sections 41-316, Idaho Code, (foreign and alien insurance deposit requirements), and 41-316A, Idaho Code, (domestic insurance deposit requirements), shall be held for the purposes stated in the respective sections.
2. A deposit made in this state by a domestic insurer transacting insurance in another state, province or country, and as required by the laws of such state, province or country, shall be held for the purpose or purposes specified pursuant to such laws.
3. Deposits of foreign insurers required pursuant to the retaliatory provision, section 41-340, Idaho Code, shall be held for such purposes as are required by such law, and as specified by the director’s order by which the deposit is required.

§ 41-803. Securities eligible for deposit.

1. All such deposits required under sections 41-316 and 41-316A, Idaho Code, for authority to transact insurance in this state shall consist of certificates of deposit issued by solvent banks, or any combination of securities the market value of which is readily ascertainable and, if negotiable by delivery or assignment, of the kinds described in the following sections:
   1. Section 41-707[, Idaho Code] (public obligations);
   2. Section 41-708[, Idaho Code] (securities of certain federal agencies);
   3. Section 41-709[, Idaho Code] (irrigation district obligations);
   4. Section 41-710[, Idaho Code] (international bank);
   5. Section 41-711[, Idaho Code] (corporate obligations);
   6. Section 41-717[, Idaho Code] (equipment trust obligations); and
   7. Section 41-720[, Idaho Code] (savings and share accounts).
2. Except that the director shall accept as a security eligible for deposit and recognize as part of the deposit any particular valid and enforceable real estate mortgage already lawfully so on deposit at the effective date of this code, so long as the mortgage continues to qualify for investment of the insurer’s funds therein as under chapter 7[, title 41, Idaho Code,] of this code and is not in default in any particular.
3. All such deposits required of a domestic insurer pursuant to the laws of another state, province or country shall be comprised of securities, if negotiable by delivery or assignment, of the kind or kinds required or permitted by the laws of such state, province or country, except stocks, mortgages of any kind and real estate.
4. Deposits of foreign insurers made in this state under the retaliatory provision, section 41-340, Idaho Code, shall consist of such securities or assets as are required by the director pursuant to such provision.

§ 41-804. Custodial arrangements for deposits.

1. All deposits of insurers made in this state under this code shall be made through the director.
2. The deposits shall be made with and held by the trust department of an established bank located in Idaho, approved by the director for the purpose, and under custodial arrangements likewise approved by him. All such custodial arrangements shall comply in substance with the requirements of this code as to the amount, purposes, maintenance, initial amounts, release and withdrawal of such a deposit, and as to the rights of the insurer therein.
3. The securities qualified for deposit under this chapter may be deposited with a clearing corporation or held in the federal reserve book-entry system. Securities deposited with a clearing corporation or held in the federal reserve book-entry system and used to meet the deposit requirements set forth in this chapter shall be under the control of the director of the department of insurance and shall not be withdrawn by the insurer without the approval of the director. Any insurer holding securities in such manner shall provide evidence satisfactory to the director, issued by its custodian or member bank through which such insurer has deposited such securities in a clearing corporation or through which such securities are held in the federal reserve book-entry system, respectively, in order to establish that the securities are actually recorded in an account in the name of the custodian or other direct participant or member bank, and that the records of the custodian, other participant or member bank reflect that such securities are held subject to the order of the director. Definitions contained in section 41-2870, Idaho Code, shall apply to this subsection (3).
4. The cost of any such custodial arrangements shall be borne by the insurer. The state of Idaho shall have no responsibility for the safekeeping of the deposit.

§ 41-805. Records — Certificate of deposit.

1. The director shall maintain complete record of all securities deposited through him under this chapter, and of all transactions involving any such deposit.
2. Upon request of the insurer and payment of the fee therefor required under section 41-401[, Idaho Code] (fee schedule), the director shall furnish to the insurer his certificate under his official seal certifying as to any deposit of the insurer held by him under this code, and as to the amount, composition, and purposes of the deposit.

§ 41-806. Assignment of securities.

1. The insurer shall duly assign to the director and his successors in office in trust all securities being deposited through him under this code which are not negotiable by delivery; or, in lieu of such assignment, the insurer may give the director an irrevocable power of attorney authorizing him to transfer the securities or any part thereof for any purpose within the scope of this chapter.
2. Upon release to the insurer, or other person entitled thereto, of any such security the director shall reassign the same to such insurer or person; or, in the case of power of attorney given pursuant to subsection (1) above, he shall deliver the power of attorney, together with the securities covered thereby, to the insurer or person entitled thereto.

§ 41-807. Appraisal.

The director may, in his discretion, prior to acceptance for deposit of any particular asset or security, or at any time thereafter while so deposited, have the same appraised or valued by competent appraisers. The reasonable costs of any such appraisal or valuation shall be borne by the insurer.

§ 41-808. Excess deposits.

1. If securities or assets deposited by an insurer under this chapter are subject to material fluctuations in market value, the director may, in his discretion, require the insurer to deposit and maintain on deposit additional securities or assets in such amount as may be reasonably necessary to assure that the deposit will at all times have a market value of not less than the amount specified under or pursuant to the law by which the deposit is required.
2. If not so required by the director, an insurer may at its option so deposit assets or securities in an amount exceeding its deposit required or otherwise permitted under this code by not more than twenty per cent (20%) of such required or permitted deposit, or twenty thousand dollars ($20,000), whichever is the larger amount, for the purpose of absorbing fluctuations in the value of securities and assets deposited, and to facilitate the exchange and substitution of such securities and assets. During the solvency of the insurer any such excess shall be released to the insurer upon its request. During the insolvency of the insurer, such excess deposit shall be released only as provided in section 41-812(2)(e)[, Idaho Code].

§ 41-809. Rights of insurer during solvency.

So long as the insurer remains solvent and is in compliance with this code it may:

1. Demand, receive, sue for and recover the income from the securities or assets deposited;
2. Exchange and substitute for the deposited securities or assets, or any part thereof, other eligible securities and assets of equivalent or greater value; and
3. At any reasonable time inspect any such deposit.

§ 41-810. Levy upon deposit.

1. No judgment creditor or other claimant of an insurer shall have the right to levy upon any of the assets or securities of the insurer held on deposit in this state pursuant to section 41-316 or 41-316A, Idaho Code.
2. As to deposits made in this state pursuant to the retaliatory provision, section 41-340, Idaho Code, levy thereupon shall be permitted only if expressly so provided in the director’s order under which the deposit is required.
3. As to the special deposit of a title insurer, if upon expiration of thirty (30) days after the judgment became final the insurer has failed to satisfy in full any final judgment rendered against it by a court of this state and arising out of any contract of insurance or guaranty issued by it, the judgment may be enforced against the insurer’s deposit. For the purposes of this provision a judgment shall be deemed to have become final upon expiration of the period permitted by law for an appeal, or, if an appeal is taken, upon dismissal of the appeal or affirmance of the judgment.
4. To obtain the enforcement referred to in subsection (3) of this section, the judgment creditor shall petition the court in the same cause in which the judgment was obtained, setting forth the facts referred to in subsection (3) of this section, and the court shall direct issuance of a special execution directed to the sheriff of Ada county of this state requiring the sheriff to sell the assets and securities of the insurer on deposit or so much thereof as may be necessary to satisfy the judgment. The court’s order authorizing the special execution shall direct that a copy of the judgment, petition, and writ of execution shall be served upon the director within five (5) days thereafter. Upon receipt of such service the director shall forthwith notify the insurer of the levy and require the insurer within such period as may be specified in the notice, which period shall be not less than ten (10) nor more than thirty (30) days after the date of the notice, to have its president or other duly authorized representative to attend with the insurer’s key and the director to the opening of the box in which the insurer’s deposit is kept. Upon the box being so opened the director shall extract therefrom and deliver to the sheriff for sale on execution deposited assets or securities of the insurer in amount, up to the full amount so on deposit, not less than as required for the satisfaction of the judgment. All proceedings for the enforcement of the writ of execution against the deposit shall conform as nearly as may be to the practice in ordinary cases except as in this subsection specially provided.
5. If the insurer, after notice by the director as required under subsection (4) of this section, willfully fails to attend to the opening of the box in which its deposit is kept, or willfully fails to permit the director to extract therefrom assets or securities as in subsection (4) of this section provided, the director shall after hearing held thereon forthwith revoke the insurer’s certificate of authority and institute proceedings for the rehabilitation or liquidation of the insurer under chapter 33[, title 41, Idaho Code] of this code. In any such proceedings the judgment with respect to which execution was issued and leading to the insurer’s failure as herein referred to, shall have a first and prior right and claim as to the assets and securities of the insurer constituting its deposit as levied against, as of the date of service upon the director of the copy of the judgment, petition, and writ of execution as provided for in subsection (4) of this section.

§ 41-811. Deficiency of deposit.

1. For the purpose of determining the sufficiency of its deposit in this state the assets and securities of the insurer on deposit shall be valued at current market value.
2. If for any reason the current market value of such assets and securities falls below the amount of deposit required of the insurer under this code, the insurer shall promptly deposit other or additional assets or securities eligible for deposit and in amount sufficient to cure the deficiency. If the insurer has failed to cure the deficiency within thirty (30) days after receipt of notice thereof by registered or certified mail from the director, the director shall forthwith without further notice revoke the insurer’s certificate of authority.

§ 41-812. Duration and release of deposit.

1. Every deposit made in this state by an insurer pursuant to this code shall be so held as long as there is outstanding any liability of the insurer as to which the deposit was required; or, if the deposit was required under the retaliatory provision, section 41-340, Idaho Code, the deposit shall be held for so long as the basis of such retaliation exists.
2. Except for good cause found by the director after a hearing thereon, any such deposit shall be released and returned:
   1. To the insurer upon extinguishment by reinsurance or otherwise of all liability of the insurer for the security of which the deposit is held. If by reinsurance, the assuming insurer shall be one authorized to transact such insurance in this state.
   2. To the insurer, during solvency, to the extent such deposit is in excess of the amount required.
   3. To a depositing foreign or alien insurer, during its solvency, which has made a similar deposit in another state and has filed with the director the certificate or evidence thereof, under the conditions provided for in section 41-316(2)(b) or 41-316(2)(c), Idaho Code.
   4. To the resulting or surviving corporation or to such person as it may designate for the purpose, upon effectuation of a merger or consolidation of the depositing insurer, and upon the resulting or surviving corporation being or becoming authorized to transact insurance in this state.
   5. Upon order of a court of competent jurisdiction, to the receiver, conservator, rehabilitator, or liquidator of the insurer, or to any other properly designated official or officials who succeed to the management and control of the insurer’s assets pursuant to delinquency proceedings brought against the insurer under chapter 33[, title 41, Idaho Code] of this code.
3. Notwithstanding the provisions of subsections (1) and (2) of this section, the director, in his discretion, may release a deposit made in this state by an insurer pursuant to this code if the insurance regulatory body in the insurer’s state has been appointed the liquidator of the insurer by a court in that state and either of the following applies:
   1. The director has no information or belief that there are any outstanding claims against the insurer by policyholders or creditors of the insurer in Idaho; or
   2. The director believes that any claims by Idaho policyholders or creditors will be adequately protected pursuant to the liquidation proceedings in the insurer’s domestic state.

§ 41-813. Proofs for release of deposit to insurer — Director’s responsibility.

1. Before authorizing or permitting the release of any deposit or excess portion thereof to the insurer, as provided in section 41-812, Idaho Code, the director shall require the insurer, the applicable insurance regulatory official in the insurer’s domestic state, or other appropriate entity to file with him a written statement in such form and with such verification as he deems advisable setting forth the facts upon which it bases its entitlement to such release.
2. If release of the deposit is claimed by the insurer upon the ground that all its liabilities, as to which the deposit was held, have been assumed by another insurer authorized to transact insurance in this state, the insurer shall file with the director a copy of the contract or agreement of such reinsurance duly attested under the oath of an officer of each of the insurers parties thereto.
3. If release of the deposit is claimed by a domestic insurer upon the ground that all its liabilities, as to which the deposit was held, have been terminated other than by reinsurance, the director shall make an examination of the affairs of the insurer for determination of the actuality of such termination.
4. Upon being satisfied by such statement and reinsurance contract, or examination of the insurer if required under subsection (3) above, and by such other examination if any, of the affairs of the insurer as he deems advisable to make, that the insurer is entitled to the release of its deposit or excess portion thereof as provided in section 41-812, Idaho Code, the director shall release the deposit or excess portion thereof to the insurer or its authorized representative.
5. If the director wilfully fails faithfully to keep, deposit, account for or surrender any such assets or securities deposited through him, in the manner as authorized or required under this chapter, he shall be liable therefor upon his official bond, and suit may be brought upon the bond by any person injured by such failure. The director shall not, however, have any liability as to any assets or securities of an insurer released by him in good faith pursuant to the authority vested in him under this chapter.

§ 41-901. Definitions.

For the purposes of this chapter:

1. “Administrator” or “third party administrator” or “TPA” means any person who directly or indirectly underwrites, collects charges or premiums from or adjusts or settles claims on residents of this state in connection with life, annuity or health insurance coverage offered or provided by an insurer, except any of the following:
   1. An employer, or a wholly owned direct or indirect subsidiary of an employer, on behalf of its employees or the employees of one (1) or more subsidiaries or affiliated corporations of such employer.
   2. A union on behalf of its members.
   3. An insurance company that is either authorized to transact insurance in this state or acting as an insurer with respect to a policy lawfully issued and delivered by such company in and pursuant to the laws of a state in which the insurer was authorized to transact an insurance business, or a hospital, medical, dental or optometric service corporation or a health care service organization, including their sales representatives, possessing a valid certificate of authority in this state when engaged in the performance of their duties.
   4. An insurance producer licensed to sell life, annuities or health coverage in this state whose activities are limited exclusively to the sale, solicitation and negotiation of insurance.
   5. A creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors.
   6. A trust, its trustees, agents and employees acting pursuant to such trust established in conformity with 29 U.S.C. 186.
   7. A trust exempt from taxation under section 501(a) of the Internal Revenue Code, its trustees and employees acting pursuant to such trust or a custodian and the custodian’s agents or employees acting pursuant to a custodian account that meets the requirements of section 401(f) of the Internal Revenue Code.
   8. A credit union or a financial institution that is subject to supervision or examination by federal or state banking authorities, or a mortgage lender, to the extent they collect and remit premiums to licensed insurance producers or to limited lines producers or authorized insurers in connection with loan payments.
   9. A credit card issuing company that advances for and collects premiums or charges from its credit cardholders who have authorized such collection.
   10. A person who adjusts or settles claims in the normal course of that person’s practice or employment as an attorney at law and who does not collect charges or premiums in connection with life, annuity or health insurance coverage.
   11. A person licensed as a managing general agent in this state whose activities are limited exclusively to the scope of activities conveyed under such license.
   12. A person who is affiliated with an insurer and who acts solely as an administrator for the direct and assumed insurance business of an affiliated insurer. The insurer is responsible for the acts of the administrator and is responsible for providing all of the administrator’s books and records to the insurance director upon a request from the insurance director. For purposes of this paragraph, “insurer” means a licensed insurance company, hospital or professional service corporation or a managed care organization.
2. “Affiliate” or “affiliated” means an entity or person who directly or indirectly through one (1) or more intermediaries controls or is controlled by, or is under common control with, a specified entity or person. (3) “Control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent (10%) or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided in section 41-3809(11), Idaho Code, that control does not exist in fact. The director may determine, after furnishing all persons in interest notice and an opportunity to be heard and making specific findings of fact to support the determination that control exists in fact, notwithstanding the absence of a presumption to that effect.

(4) “Director” means the director of the Idaho department of insurance.

(5) “GAAP” means United States “generally accepted accounting principles” consistently applied.

(6) “Home state” means the District of Columbia and any state or territory of the United States in which an administrator is incorporated or maintains its principal place of business. If neither the state in which the administrator is incorporated nor the state in which it maintains its principal place of business has adopted the provisions of this chapter, or a substantially similar law governing administrators, the administrator may declare another state in which it conducts business to be its “home state.”

(7) “Insurer” means a person undertaking to provide life, annuity or health coverage or self-funded coverage who is subject to regulation under title 41, Idaho Code.

(8) “NAIC” means the “national association of insurance commissioners.”

(9) “Nonresident administrator” means an administrator with a home state other than Idaho.

(10) “Underwrites” or “underwriting” means, but is not limited to, the acceptance of employer or individual applications for coverage of individuals in accordance with the written rules of the insurer or self-funded plan, or the overall planning and coordinating of a benefits program.

(11) “Uniform application” means the current version of the NAIC uniform application for third party administrators.

§ 41-902. Written agreement necessary.

1. No administrator shall act as such without a written agreement between the administrator and the insurer, and the written agreement shall be retained as part of the official records of both the insurer and the administrator for the duration of the agreement and for five (5) years thereafter. The agreement shall be consistent with the provisions of this chapter and shall contain all provisions required in this chapter, except insofar as those requirements do not apply to the functions performed by the administrator.
2. The written agreement shall include a statement of duties that the administrator is expected to perform on behalf of the insurer and the lines, classes or types of insurance for which the administrator is to be authorized to administer. The agreement shall make provision with respect to underwriting or other standards pertaining to the business underwritten by the insurer.
3. The insurer or administrator may, with written notice to the other party and the director, terminate the written agreement as provided in the agreement. The insurer may suspend the underwriting authority of the administrator during the pendency of any dispute regarding the termination of the written agreement. The insurer shall fulfill any lawful obligations with respect to policies affected by the written agreement regardless of any dispute between the insurer and the administrator.

§ 41-903. Payment to administrator.

If an insurer utilizes the services of an administrator, the payment to the administrator of any premiums or charges for insurance by or on behalf of the insured shall be deemed to have been received by the insurer and the payment of return premiums or claims forwarded by the insurer to the administrator shall not be deemed payment to the insured or claimant until the payments are received by the insured or claimant. Nothing in this chapter limits any right of the insurer against the administrator resulting from the failure of the administrator to make payments to the insurer, insured parties or claimants.

§ 41-904. Maintenance of information.

1. Every administrator shall maintain and make available to the insurer complete books and records of all transactions performed on behalf of the insurer. The books and records shall be maintained in accordance with prudent standards of insurance recordkeeping and shall be maintained for a period of not less than five (5) years from the date of their creation.
2. The director shall have access to books and records maintained by an administrator for the purposes of examination, audit and inspection.
3. The insurer shall own the records generated by the administrator pertaining to the insurer; however, the administrator shall retain the right to continuing access to books and records to permit the administrator to fulfill all of its contractual obligations to insured parties, claimants and the insurer, and its obligations to maintain records available to the director.
4. In the event the insurer and the administrator cancel their agreement, notwithstanding the provisions of subsection (1) of this section, the administrator may, by written agreement with the insurer, transfer all records to a new administrator rather than retain them for five (5) years. In such cases, the new administrator shall acknowledge, in writing, that it is responsible for retaining the records of the prior administrator as required in subsection (1) of this section.

§ 41-905. Advertising — Approval.

An administrator may use only advertising pertaining to the business underwritten by an insurer that has been approved in writing by the insurer in advance of its use. Prior to approving the use of advertising by an administrator, the insurer shall first file the advertising with the director along with a certification in a form prescribed by the director that the advertising complies with Idaho law. The director may disapprove the use of the advertising on any of the grounds set forth in section 41-1813, Idaho Code.

§ 41-906. Premium collection and payment of claims.

1. All insurance charges or premiums collected by an administrator on behalf of or for an insurer, and the return of premiums received from that insurer, shall be held by the administrator in a fiduciary capacity. The funds shall be immediately remitted to the person entitled to them or shall be deposited promptly in a fiduciary account established and maintained by the administrator in a federally or state insured financial institution. The written agreement between the administrator and the insurer shall provide for the administrator to periodically render an accounting to the insurer detailing all transactions performed by the administrator pertaining to the business underwritten by the insurer.
2. All such funds, including charges, fees or premiums, shall be used to establish the premium tax under section 41-402, Idaho Code.
3. If charges or premiums deposited in a fiduciary account have been collected on behalf of one (1) or more insurers, the administrator shall keep records clearly recording the deposits in and withdrawals from the account on behalf of each insurer. The administrator shall keep copies of all the records and, upon request of an insurer, shall furnish the insurer with copies of such records pertaining to deposits and withdrawals associated with the insurer.
4. The administrator shall not pay any claim by withdrawals from a fiduciary account in which premiums or charges are deposited. Withdrawals from the account shall be made as provided in the written agreement between the administrator and the insurer. The written agreement shall address, but not be limited to, the following:
   1. Remittance to an insurer entitled to remittance;
   2. Deposit in an account maintained in the name of the insurer;
   3. Transfer to and deposit in a claims-paying account with claims to be paid as provided for in subsection (5) of this section;
   4. Payment to a group policyholder for remittance to the insurer entitled to such remittance;
   5. Payment to the administrator of its commission, fees or charges; and
   6. Remittance of return premiums to the person or persons entitled to such return premiums.
5. All claims paid by the administrator from funds collected on behalf of or for an insurer shall be paid only on drafts or checks of and as authorized by the insurer.

§ 41-907. Delivery of materials to covered individuals.

Any policies, certificates, booklets, termination notices or other written communications delivered by the insurer to the administrator for delivery to insured parties or covered individuals shall be delivered by the administrator promptly after receipt of instructions from the insurer to deliver them.

§ 41-908. Compensation to the administrator.

1. An administrator shall not enter into an agreement or understanding with an insurer in which the effect is to make the amount of the administrator’s commissions, fees or charges contingent upon savings effected by the adjustment, settlement and payment of losses covered by the insurer’s obligations. This provision shall not prohibit an administrator from receiving performance-based compensation for providing hospital or other auditing services.
2. The provisions of this section shall not prevent the compensation of an administrator from being based on premiums or charges collected or the number of claims paid or processed.

§ 41-909. Notice to covered individuals — Disclosure of charges and fees.

1. Where the services of an administrator are utilized, the administrator shall provide a written notice approved by the insurer to covered individuals advising them of the identity of and relationship among the administrator, the policyholder and the insurer.
2. Where an administrator collects funds, the reason for collection of each item shall be identified to the insured party and each item shall be shown separately from any premium. Additional charges may not be made for services to the extent the services have been paid for by the insurer.
3. The administrator shall disclose to the insurer all charges, fees and commissions received from all services in connection with the provision of administrative services for the insurer, including any fees or commissions paid by insurers providing reinsurance.

§ 41-910. Registration requirement.

A person who directly or indirectly underwrites, collects charges or premiums from or adjusts or settles claims on residents of this state in connection with life, annuity or health coverage provided by a self-funded plan not regulated under title 41, Idaho Code, shall register with the director biennially on a form prescribed by the director, verifying its status as herein described.

§ 41-911. Home state license.

1. A person shall apply to be an administrator in its home state and shall receive a license from the regulatory authority of its home state prior to performing any function of an administrator in this state.
2. A person applying to Idaho as the home state shall submit to the director an application in the form prescribed by the director that shall include or be accompanied by the following information and documents:
   1. All basic organizational documents of the applicant, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement, certificate of existence from the Idaho secretary of state and other applicable documents and all amendments to such documents;
   2. The bylaws, rules, regulations or similar documents regulating the internal affairs of the applicant;
   3. NAIC biographical affidavits for the individuals who are directly or indirectly responsible for the conduct of affairs of the applicant, including all members of the board of directors, board of trustees, executive committee or other governing board or committee, the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company, any shareholders or members holding directly or indirectly ten percent (10%) or more of the voting stock, voting securities or voting interest of the applicant and any other person who directly or indirectly exercises control or influence over the affairs of the applicant;
   4. Audited annual financial statements or reports for the two (2) most recent fiscal years that demonstrate that the applicant has a positive net worth. If the applicant has been in existence for less than two (2) fiscal years, the uniform application shall include financial statements or reports, certified by at least two (2) officers, owners or directors of the applicant and prepared in accordance with GAAP, for any completed fiscal years and for any month during the current fiscal year for which such financial statements or reports have been completed. An audited annual financial report prepared on a consolidated basis shall include a columnar consolidating or combining worksheet that shall be filed with the report and include the following:
      1. Amounts shown on the consolidated audited financial report shall be shown on the worksheet;
      2. Amounts for each entity shall be stated separately; and
      3. Explanations of consolidating and eliminating entries shall be included.
   5. In lieu of submitting audited financial statements, and upon written application by an applicant and good cause shown, the director may grant a hardship exemption from filing audited financial statements and allow the submission of unaudited financial statements. Acceptable formats for unaudited financial statements, which shall include notes, are:
      1. Reports compiled or reviewed by a certified public accountant; or
      2. Internal financial reports prepared in accordance with GAAP, certified by at least two (2) officers, owners or directors of the administrator.
3. An administrator licensed or applying for licensure under the provisions of this section shall make available for inspection by the director, copies of all contracts with insurers or other persons utilizing the services of the administrator.
4. An administrator licensed or applying for licensure under the provisions of this section shall produce its accounts, records and files for examination, and make its officers available to give information with respect to its affairs, as often as reasonably required by the director.
5. The director may refuse to issue a license if the director determines that the applicant or any individual responsible for the conduct of affairs of the applicant is not competent, trustworthy, financially responsible or of good personal and business reputation, or has had an insurance or an administrator certificate of authority or license denied or revoked for cause by any jurisdiction, or if the director determines that any of the grounds set forth in section 41-915, Idaho Code, exist with respect to the applicant.
6. A license issued under this section shall remain valid, unless surrendered, suspended or revoked by the director, for so long as the administrator continues in business in this state and remains in compliance with the provisions of this chapter and any applicable rules.
7. An administrator licensed or applying for licensure under the provisions of this section shall immediately notify the director of any material change in its ownership, control or other fact or circumstance affecting its qualification for a license in this state.
8. An administrator licensed or applying for a home state license that administers or will administer self-funded health plans subject to regulation under chapter 40 or 41, title 41, Idaho Code, shall maintain a surety bond in a form prescribed by the director for the use and benefit of the director to be held in trust for the benefit and protection of covered persons and any insurer or self-funded plan against loss by reason of acts of fraud or dishonesty. The bond shall be in the greater of the following amounts:
   1. One hundred thousand dollars ($100,000); or

The applicant shall also include such other information as the director may require in order to review the current financial condition of the applicant;

If unaudited financial statements are submitted, the applicant must also secure and maintain a surety bond in a form prescribed by the director for the use and benefit of the director to be held in trust for the benefit and protection of covered persons and any insurer or self-funded plan against loss by reason of acts of fraud or dishonesty, for the greater of ten percent (10%) of funds handled for the benefit of Idaho residents or twenty thousand dollars ($20,000). Administrators of self-funded plans in Idaho are subject to the mandatory surety bond requirement found in subsection (8) of this section, regardless of whether they file audited or unaudited financial reports; (f) A statement describing the business plan, including information on staffing levels and activities, proposed in this state and nationwide. The plan shall provide details setting forth the applicant’s capability for providing a sufficient number of experienced and qualified personnel in the areas of claims processing, recordkeeping and underwriting;

(g) The license application fee as provided for by rule; and

(h) Such other pertinent information as may be required by the director.

§ 41-912. Nonresident administrator license.

1. Unless an administrator has obtained a home state license in this state, any administrator who performs administrator duties in this state shall obtain a nonresident administrator license in accordance with the provisions of this section by filing with the director the uniform application, accompanied by a letter of certification. In lieu of requiring an administrator to file a letter of certification with the uniform application, the director may verify the nonresident administrator’s home state certificate of authority or license status through an electronic database maintained by the NAIC, its affiliates or subsidiaries.
2. An administrator shall not be eligible for a nonresident administrator license under the provisions of this section if it does not hold a license in a home state that has adopted under the provisions of this chapter or a substantially similar law governing administrators.
3. Except as provided in subsections (2) and (8) of this section, the director shall issue to the administrator a nonresident administrator license promptly upon receipt of a complete application.
4. Each nonresident administrator shall file biennially, as a part of its application for renewal of its license, a statement that its home state administrator license remains in force and has not been revoked or suspended by its home state during the preceding years.
5. At the time of filing the application for licensing required under the provisions of this section the nonresident administrator shall pay a license application fee as provided for by rule.
6. An administrator licensed or applying for licensure under the provisions of this section shall produce its accounts, records and files for examination, and make its officers available to give information with respect to its affairs, as often as reasonably required by the director.
7. A nonresident administrator is not required to hold a nonresident administrator license in this state if the administrator is licensed in its home state and the administrator’s duties in this state are limited to:
   1. The administration of a group policy or plan and no more than a total of twenty percent (20%) of covered persons, for all plans the administrator services, reside in this state; and
   2. The total number of covered persons residing in this state is less than one hundred (100).
8. The director may refuse to issue a nonresident administrator license, or delay the issuance of a nonresident administrator license, if the director determines that, due to events or information obtained subsequent to the home state’s licensure of the administrator, the nonresident administrator cannot satisfy the requirements of this chapter or that grounds exist for the home state’s revocation or suspension of the administrator’s home state certificate of authority or license.

§ 41-913. Expiration and renewal of administrator license.

1. A license issued pursuant to this chapter shall expire on December 31 of the year following its issuance, but may be renewed for a period of two (2) years commencing January 1 upon filing a renewal form prescribed by the director accompanied by a fee as provided for by rule. The renewal form shall be filed on or before December 31. Any renewal form postmarked or submitted electronically after December 31 shall be accompanied by an additional late filing fee in the amount of double the unpaid renewal fee. Any renewal postmarked after January 31 must be submitted as a new application with supporting documents and accompanied by the full application fee as provided for by rule.
2. The license shall be renewed by the director unless the director determines that the administrator is not competent, trustworthy or financially responsible, or has had an insurance license denied, revoked or suspended for cause by any state, or otherwise does not meet the qualifications for licensure as set forth in this chapter.

§ 41-914. Annual report.

1. Each administrator licensed under the provisions of this chapter shall file an annual report for the preceding calendar year with the director on or before July 1 of each year, or within such extension of time as the director for good cause may grant. The annual report shall include:
   1. An audited financial statement attested to by an independent certified public accountant. An audited annual financial report prepared on a consolidated basis shall include a columnar consolidating or combining worksheet that shall be filed with the report and include the following:
      1. Amounts shown on the consolidated audited financial report shall be shown on the worksheet;
      2. Amounts for each entity shall be stated separately; and
      3. Explanations of consolidating and eliminating entries shall be included.
   2. In lieu of submitting an audited financial statement, and upon written application by an administrator and good cause shown, the director may grant a hardship exemption from filing audited financial statements and allow the submission of unaudited financial statements. Acceptable formats for unaudited financial statements, which shall include notes, are:
      1. Reports compiled or reviewed by a certified public accountant; or
      2. Internal financial reports prepared in accordance with GAAP, certified by at least two (2) officers, owners or directors of the administrator.
2. The annual report shall be in the form and contain such matters as the director prescribes and shall be verified by at least two (2) officers, owners or directors of the administrator.
3. The annual report shall include the complete names and addresses of all insurers and for self-funded plans, all employers and trusts, with which the administrator had agreements during the preceding fiscal year. The report shall also include the number of Idaho residents covered by each of the plans.

If unaudited financial statements are submitted, the administrator must secure and maintain a surety bond in a form prescribed by the director for the use and benefit of the director to be held in trust for the benefit and protection of covered persons and any insurer or self-funded plan against loss by reason of acts of fraud or dishonesty, for the greater of ten percent (10%) of funds handled for the benefit of Idaho residents or twenty thousand dollars ($20,000).

§ 41-915. Grounds for denial, suspension or revocation of license.

1. The license of an administrator shall be denied, suspended or revoked if the director finds that the administrator:
   1. Is in an unsound financial condition;
   2. Is using such methods or practices in the conduct of its business so as to render its further transaction of business in this state hazardous or injurious to insured persons or the public; or
   3. Has failed to pay any judgment rendered against it in this state within sixty (60) days after the judgment has become final.
2. The director may deny, suspend or revoke the license of an administrator if the director finds that the administrator:
   1. Has violated any lawful rule or order of the director or any provision of title 41, Idaho Code;
   2. Has refused to be examined or to produce its accounts, records and files for examination, or if any individual responsible for the conduct of affairs of the administrator, including members of the board of directors, board of trustees, executive committee or other governing board or committee, the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company, any shareholder or member holding directly or indirectly ten percent (10%) or more of the voting stock, voting securities or voting interest of the administrator and any other person who exercises control or influence over the affairs of the administrator, has refused to give information with respect to its affairs or has refused to perform any other legal obligation as to an examination, when required by the director;
   3. Has, without just cause, refused to pay proper claims or perform services arising under its contracts or has, without just cause, caused covered individuals to accept less than the amount due them or caused covered individuals to employ attorneys or bring suit against the administrator to secure full payment or settlement of such claims;
   4. Fails, at any time, to meet any qualification for which issuance of the license could have been refused had the failure then existed and been known to the director;
   5. Or any of the individuals responsible for the conduct of its affairs, including members of the board of directors, board of trustees, executive committee or other governing board or committee, the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company, any shareholder or member holding directly or indirectly ten percent (10%) or more of its voting stock, voting securities or voting interest and any other person who exercises control or influence over its affairs, has been convicted of, or has entered a plea of guilty or nolo contendere to any crime that is deemed relevant in accordance with section 67-9411(1), Idaho Code, or that evidences dishonesty, a lack of integrity and financial responsibility, or an unfitness and inability to provide acceptable service to the consuming public without regard to whether adjudication was withheld; or
   6. Is under suspension or revocation in another state.
3. The director may, in his discretion and without advance notice or hearing, immediately suspend the license of an administrator if the director finds that one (1) or more of the following circumstances exist: (a) The administrator is insolvent or impaired;
4. If the director finds that one (1) or more grounds exist for the suspension or revocation of a license issued under the provisions of this chapter, the director may, in lieu of or in addition to suspension or revocation, impose an administrative penalty upon the administrator pursuant to section 41-117, Idaho Code.

(b) A proceeding for receivership, conservatorship, rehabilitation or other delinquency proceeding regarding the administrator has been commenced in any state;

(c) The financial condition or business practices of the administrator otherwise pose an imminent threat to the public health, safety or welfare of the residents of this state; or

(d) A final order suspending or revoking the administrator’s license in its home state has been entered.

§ 41-916. Reporting of actions.

1. An administrator shall report to the director any administrative action taken against the administrator in another jurisdiction or by another governmental agency within thirty (30) days of the final disposition of the matter. The report shall include a copy of the order, consent order or other relevant legal documents.
2. Within thirty (30) days of the initial pretrial hearing date, an administrator shall report to the director any criminal prosecution of the administrator or an individual responsible for the conduct of its affairs taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents.

§ 41-917. Provisions not limiting.

The requirements of this chapter are not a waiver or limitation of provisions of this title or other laws of this state but are additional requirements.

§ 41-1001. Purpose and scope.

1. This chapter governs the qualifications and procedures for the licensing of insurance producers. It simplifies and organizes statutory language to improve efficiency, permits the use of new technology and reduces costs associated with issuing and renewing insurance licenses.
2. This chapter applies to adjusters to the extent provided in section 41-1108, Idaho Code, and to surplus lines brokers to the extent provided in sections 41-1223 and 41-1224, Idaho Code. Except where expressly made applicable, this chapter does not apply to title insurance under chapter 27, title 41, Idaho Code.

§ 41-1003. Definitions.

1. “Business entity” means a corporation, association, partnership, limited liability company, limited liability partnership or other legal entity.
2. “Home state” means the District of Columbia and any state or territory of the United States or any province of Canada in which an insurance producer maintains his or her principal place of residence or principal place of business and is licensed to act as an insurance producer.
3. “License” means a document issued by the director authorizing a person to act as an insurance producer for the lines of authority specified in the document. The license itself does not create any authority, actual, apparent or inherent, in the holder to represent or commit an insurance carrier.
4. “Limited lines insurance” is insurance which restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to section 41-1008(1)(a) through (g), Idaho Code, and shall include, but not be limited to: credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection (GAP) insurance, transportation baggage insurance, transportation ticket policies covering personal accident insurance, pet insurance, portable electronics insurance, travel insurance or any other line of insurance that the director deems necessary to recognize for the purposes of complying with section 41-1009(5), Idaho Code.
5. “Limited lines producer” means a producer authorized by the director to sell, solicit or negotiate limited lines insurance. “Limited lines producer” includes a “limited lines travel insurance producer” as used in sections 41-1090 through 41-1096, Idaho Code.
6. “Negotiate” means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract, provided that the person engaged in the act either sells insurance or obtains insurance from insurers for purchasers.
7. “Person” means an individual or a business entity.
8. “Producer” means a person required to be licensed under the laws of this state to sell, solicit or negotiate insurance.
9. “Resident” means a person whose home state is Idaho or any other particular state identified in conjunction with the use of the term.
10. “Sell” means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.
11. “Solicit” means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company or companies.
12. “Terminate” means the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer’s authority to transact insurance for or on behalf of an insurer.
13. “Uniform application” means the current version of the national association of insurance commissioners (NAIC) uniform application for resident and nonresident producer licensing.

§ 41-1004. License required.

1. A person shall not sell, solicit or negotiate insurance in this state for any class or classes of insurance unless the person is licensed as a producer for that line of authority in accordance with this chapter.
2. A person shall not, for a fee, engage in the business of offering any advice, counsel, opinion or service with respect to the benefits, advantages or disadvantages under any policy of insurance that could be issued in Idaho unless that person is:
   1. A licensed insurance producer offering advice concerning a class of insurance as to which the producer is licensed to transact business in this state;
   2. An attorney rendering services in the performance of the duties of an attorney;
   3. A certified public accountant rendering services in the performance of the duties of a certified public accountant, as authorized by law;
   4. An actuary rendering actuarial services if such actuary is a member of an organization determined by the director as establishing standards for the actuarial profession;
   5. A person providing services to producers or authorized insurers only;
   6. A person rendering services as an expert pursuant to the Idaho rules of evidence;
   7. An investment adviser, investment adviser representative or federally [federal] covered investment adviser as defined in section 30-14-102, Idaho Code; or
   8. A person rendering such services pursuant to a license issued in accordance with sections 41-1081 through 41-1089[, Idaho Code,\'7d of this chapter.

§ 41-1006. Application for examination.

1. A resident individual applying for an insurance producer license shall pass a written examination unless exempt pursuant to section 41-1008(4) or 41-1012, Idaho Code. The examination shall test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer and the insurance laws and rules of this state. Examinations required by this section shall be developed and conducted under rules prescribed by the director of the department of insurance.
2. Each individual applying for an examination shall remit a nonrefundable fee as promulgated by the director pursuant to section 41-401, Idaho Code.
3. An individual who fails to appear for the examination as scheduled or who fails to pass the examination shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.
4. Applications for licensure not received by the department within one hundred eighty (180) days of the successful completion of the examination shall be denied.

§ 41-1007. Application for producer license.

1. A person applying for a resident insurance producer license shall make application to the director on the uniform application and declare under penalty of refusal, suspension or revocation of the license that the statements made in the application are true, correct and complete to the best of the applicant’s knowledge and belief. Before approving the application, the director shall find that the applicant:
   1. Is at least eighteen (18) years of age;
   2. Has submitted the applicant’s fingerprints as may be required by the director;
   3. Has not committed any act that is a ground for denial, suspension or revocation of the license as set forth in title 41, Idaho Code;
   4. Has paid the fees prescribed by the director pursuant to section 41-401, Idaho Code; and
   5. Has successfully passed the examinations for the lines of authority for which the applicant has applied.
2. A business entity acting as an insurance producer is required to obtain an insurance producer license. Application shall be made using the uniform business entity application. Before approving the application, the director shall find that:
   1. The business entity has paid the fees prescribed by the director pursuant to section 41-401, Idaho Code; and
   2. The business entity has designated a licensed producer, who is an individual responsible for the business entity’s compliance with the insurance laws and rules of this state.
3. The director may require any documents which are reasonably necessary to verify the information contained in an application.
4. Each insurer that sells, solicits or negotiates any form of limited line insurance shall provide to each individual whose duties will include selling, soliciting or negotiating limited lines insurance a program of instruction that may be required to be approved by the director. If acceptable to the director, and as stated by rule, the program of instruction may be administered in place of the examination as required in section 41-1006, Idaho Code. In addition, such course of instruction may be administered in place of any continuing education requirements pursuant to section 41-1013, Idaho Code.

§ 41-1008. Producer license.

1. Unless denied licensure pursuant to section 41-1016, Idaho Code, persons who have met the requirements of sections 41-1006 and 41-1007, Idaho Code, shall be issued an insurance producer license. An insurance producer may receive qualification for a license in one (1) or more of the following lines of authority:
   1. Life insurance coverage on human lives, including benefits of endowment and annuities, benefits in the event of death or dismemberment by accident, and benefits for disability income;
   2. Disability, including accident and health or sickness insurance coverage for sickness, bodily injury or accidental death and benefits for disability income;
   3. Property insurance coverage for the direct or consequential loss or damage to property of every kind;
   4. Casualty insurance coverage against legal liability, including liability for death, injury or disability or damage to real or personal property;
   5. Variable life and variable annuity products, meaning insurance coverage provided under variable life insurance contracts and variable annuities;
   6. Personal lines, meaning property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes;
   7. Any other line of insurance permitted under state laws or rules.
2. An insurance producer license shall remain in effect unless revoked or suspended as long as the renewal fee promulgated by the director pursuant to section 41-401, Idaho Code, is paid and the continuing education requirements for resident insurance producers are met in accordance with section 41-1013, Idaho Code.
3. An individual insurance producer who allows his or her license to lapse may, within twelve (12) months from the due date of the renewal fee, reinstate the same license without passing a written examination unless the licensee would otherwise be required to retest under section 41-1013(7), Idaho Code. However, a penalty in the amount of double the unpaid renewal fee shall be required for any renewal fee received after the due date.
4. A licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance, such as a long-term medical disability, may request that the director waive those procedures. The producer may also request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures.
5. The license shall contain the licensee’s name, address, personal identification number, the date of issuance, the lines of authority, the expiration date and any other information the director deems necessary.
6. Licensees shall inform the director by any means acceptable to the director of a change of address within thirty (30) days of the change. A business entity licensed as a producer shall inform the director by any means acceptable to the director of any change in ownership, officers, directors or the designated licensed producer responsible for compliance pursuant to section 41-1007(2)(b), Idaho Code.

§ 41-1009. Nonresident producer license.

1. Unless denied licensure pursuant to section 41-1016, Idaho Code, a nonresident applicant shall receive a nonresident producer license if:
   1. The applicant is currently licensed as a resident and in good standing in his or her home state;
   2. The applicant has submitted the proper request for licensure and has paid the fees set forth by rule pursuant to section 41-401, Idaho Code;
   3. The applicant has submitted or transmitted to the director the application for licensure that the applicant submitted to his or her home state or, in lieu of such application, a completed uniform application;
   4. The applicant has submitted the applicant’s fingerprints, if required by the director, on a form as prescribed by the director; and
   5. The applicant’s home state awards nonresident producer licenses to residents of this state on the same basis.
2. The director may verify the producer’s licensing status through the producer database maintained by the national association of insurance commissioners, its affiliates or subsidiaries, or by any other acceptable means.
3. A nonresident producer who moves from one state to another state or a resident producer who moves from this state to another state shall file a change of address and provide certification from the new resident state within thirty (30) days of the change of legal residence. No fee or license application shall be required for filing the change of address.
4. Notwithstanding any other provision of this chapter, a person licensed as a surplus lines broker in his or her home state shall receive a nonresident surplus lines broker license pursuant to subsection (1) of this section. Except as to subsection (1) of this section, nothing in this section otherwise amends or supersedes any provision of section 41-1223, Idaho Code.
5. Notwithstanding any other provision of this chapter, a person licensed as a limited lines producer in his or her home state shall receive a nonresident limited lines producer license, pursuant to subsection (1) of this section, granting the same scope of authority as granted under the license issued by the producer’s home state. For the purposes of this subsection, limited lines insurance is any authority granted by the home state which restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to section 41-1008(1)(a) through (g), Idaho Code.

§ 41-1010. Nonresident producers — Service of process.

1. Each person applying to be a nonresident producer shall, on a form prescribed by the director, appoint the director as his agent for purposes of receiving service of legal process issued against the producer in this state upon causes of action arising within this state out of transactions under the license. Service upon the director as an agent shall constitute effective legal service upon the producer.
2. The appointment shall be irrevocable for as long as there could be any cause of action against the licensee arising out of his insurance transactions in or with respect to this state.
3. Duplicate copies of such legal process against the licensee shall be served upon the director by a person competent to serve a summons. At the time of service the plaintiff shall pay the director an appropriate fee to be determined by rule and not exceeding thirty dollars ($30.00).
4. Upon receiving such service, the director shall send one (1) copy of the process by registered or certified mail with return receipt requested to the defendant licensee at his last address of record with the director.
5. The director shall keep a record of the day and hour of such service upon him. No proceedings shall be brought against the producer, and the producer shall not be required to appear, plead or answer until the expiration of thirty (30) days after the date of service upon the director.

§ 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.

§ 41-1012. Exemption from examination.

1. An individual who applies for an insurance producer license in this state and who was previously licensed for the same lines of authority in another state shall not be required to complete any prelicensing examination if:
   1. The person is currently licensed in another state; or
   2. The application is received within ninety (90) days of the cancellation of the applicant’s previous license and the prior state issues a certification that:
      1. At the time of cancellation, the applicant was in good standing in that state; or
      2. The state’s producer database records, as maintained by the national association of insurance commissioners or its affiliates or subsidiaries, indicate that the producer is or was licensed in good standing for the lines of authority requested.
2. A person licensed as an insurance producer in another state who moves to this state shall make application within ninety (90) days of establishing legal residence to become a resident licensee pursuant to section 41-1006, Idaho Code. No examination shall be required of that person to obtain any line of authority previously held in the prior state unless the director provides otherwise by rule.

§ 41-1013. Continuation — Expiration of licenses — Continuing education statement.

1. All producer, adjuster, and surplus line broker licenses issued under this code shall continue in force until expired, suspended, revoked or otherwise terminated, subject to payment of the applicable continuation fee on or before the expiration date referred to in subsection (2) of this section, accompanied by a written request for such continuation and a continuing education statement verifying that the licensee has completed any continuing education requirements imposed by the director. An application for renewal is not complete unless it is submitted with both the applicable fee and the completed continuing education statement. Requests for continuation shall be made in writing on forms to be prescribed by the director.
2. The director may fix the dates of expiration for licenses in such manner as is deemed by him to be advisable for an efficient distribution of the workload of his office. If the expiration date for a particular license or appointment would shorten the period for which the license or appointment continuation fee has been paid, no refund of an unearned fee shall be made. If the expiration date for a particular license or appointment would lengthen the period for which a license or appointment continuation fee has been paid, the director shall charge no additional fee for such lengthened period.
3. Any license referred to in subsection (1) of this section for which no request for continuation, fee and completed continuing education statement are timely received by the director shall be deemed to have expired at midnight on the applicable expiration date.
4. All sums tendered as fees for continuations of licenses as producer, limited lines producer, adjuster or surplus line broker shall be deemed earned when paid and shall not be subject to refund, except that the director shall refund any duplicate payment of fees.
5. For the protection of the people of this state the director shall establish, by rule, additional educational requirements designed to maintain and improve the insurance skills and knowledge of resident producers after licensure by the department of insurance. The director shall also establish, by rule, an advisory committee comprised of representatives from each segment of the insurance industry to assist the director in prescribing additional educational requirements. Such rules promulgated by the director shall include limits on the terms of service for members of the committee.
6. Subject to subsection (3) of this section, the director shall not permit to be continued the license of any producer who is licensed pursuant to section 41-1007, Idaho Code, who is a resident of this state, unless such person has demonstrated to the satisfaction of the director that in addition to meeting the standards contained in sections [section] 41-1007, (qualifications for producer license), Idaho Code, as may be applicable, all the additional educational requirements as the director may prescribe by rule have been met.

§ 41-1014. Assumed names.

An insurance producer doing business under any name other than the producer’s legal name is required to notify the director in writing prior to using the assumed name.

§ 41-1015. Temporary licensing.

1. The director may issue a temporary insurance producer license for a period not to exceed one hundred eighty (180) days without requiring an examination if the director deems that the temporary license is necessary for the servicing of an insurance business in the following cases:
   1. To the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled in order to allow adequate time for the sale of the insurance business owned by the producer or for the recovery or return of the producer to the business or to provide for the training and licensing of new personnel to operate the producer’s business;
   2. To a member or employee of a business entity licensed as an insurance producer upon the death or disability of an individual designated in the business entity application or the license;
   3. To the designee of a licensed insurance producer entering active service in the armed forces of the United States of America; or
   4. Pursuant to section 41-1011, Idaho Code, or in any other circumstance where the director deems the public interest will best be served by the issuance of the temporary license.
2. The director may by order limit the authority of any temporary licensee in any way deemed necessary to protect insureds and the public. The director may require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and who assumes responsibility for all actions of the temporary licensee, and may impose other similar requirements designed to protect insureds and the public. The director may by order revoke a temporary license, without the right to a prior hearing, if the interests of insureds or the public are endangered. A temporary license may not continue after the owner or the personal representative disposes of the business.

§ 41-1016. Administrative penalty — Suspension, revocation, refusal of license.

1. The director may impose an administrative penalty not to exceed one thousand dollars ($1,000), for deposit in the general fund of the state of Idaho, and may suspend for not more than twelve (12) months or may revoke or refuse to issue or continue any license issued under this chapter, chapter 27, title 41, Idaho Code (title insurance), chapter 11, title 41, Idaho Code (adjusters), or chapter 12, title 41, Idaho Code (surplus lines brokers), if the director finds that as to the licensee or applicant any one (1) or more of the following causes or violations exist:
   1. Providing incorrect, misleading, incomplete or materially untrue information in the license application;
   2. Violating any provision of title 41, Idaho Code, department rule, subpoena or order of the director or of another state’s insurance director;
   3. Obtaining or attempting to obtain a license through misrepresentation or fraud;
   4. Improperly withholding, misappropriating or converting any moneys or properties received in the course of doing insurance business;
   5. Misrepresenting the terms of an actual or proposed insurance contract or application for insurance or misrepresenting any fact material to any insurance transaction or proposed transaction;
   6. Being convicted of or pleading guilty to a crime that is deemed relevant in accordance with section 67-9411(1), Idaho Code, or that evidences dishonesty, a lack of integrity and financial responsibility, or an unfitness and inability to provide acceptable service to the consuming public;
   7. Admitting or being found to have committed any insurance unfair trade practice or fraud;
   8. Using fraudulent, coercive or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility, or being a source of injury and loss to the public or others, in the conduct of business in this state or elsewhere;
   9. Having an insurance license denied, suspended or revoked in any other state, province, district or territory;
   10. Forging another’s name on an application for insurance or on any document related to an insurance transaction;
   11. Improperly using notes or any other reference material to complete an examination for an insurance license;
   12. Knowingly accepting insurance business from an individual who is not licensed;
   13. Failing to comply with an administrative or court order imposing a child support obligation, provided however, that nothing in this provision shall be deemed to abrogate or modify chapter 14, title 7, Idaho Code;
   14. Failing to pay state income tax or to comply with any administrative or court order directing payment of state income tax; or
   15. In the case of a bail agent, compensating or agreeing to compensate any incarcerated person to influence or encourage another incarcerated person or other incarcerated persons to engage the bail agent’s services or the services of the bail agent’s company or of other bail agents employed by such bail company. For purposes of this subsection, compensating any incarcerated person shall include providing payment in any form to any person, organization or entity designated by the incarcerated person to receive such payment. (2) The director shall, without hearing, suspend for not more than twelve (12) months, or shall revoke or refuse to continue any license issued under this chapter to a nonresident where:
       1. Voluntarily surrendered for any reason except relicensing as a resident in another state; or
       2. Otherwise nonrenewed by the nonresident and remains nonrenewed for a period greater than ninety (90) days beyond its expiration date, and without notice to the director of relicensing as a resident in another state.

(a) The director has received a final order of suspension, revocation or refusal to continue from the insurance regulatory official or court of jurisdiction of the licensee’s home state; or

(b) A nonresident no longer has a license in the licensee’s home state because the home state license was:

If cause under this provision exists after the expiration of the twelve (12) months, successive suspensions may be imposed by the director without hearing.

(3) The license of a business entity may be suspended, revoked or refused if the director finds that the violation of an individual licensee, who is registered to or acting on behalf of the business entity, was known or should have been known by one (1) or more of the owners, officers or managers acting on behalf of the business entity and that the violation was not reported to the director and no corrective action was taken.

(4) In addition to or in lieu of any applicable denial, suspension or revocation of a license, a person may, after hearing, be subject to a civil fine or administrative penalty pursuant to subsection (1) of this section or any other applicable section.

(5) The director shall retain the authority to enforce the provisions of and impose any penalty or remedy authorized by title 41, Idaho Code, against any person who is under investigation for or charged with a violation of title 41, Idaho Code, or department rule, even if the person’s license or registration has been surrendered or has lapsed by operation of law, or if the person has never been licensed.

§ 41-1017. Commissions.

1. An insurance company or insurance producer shall not pay a commission, service fee or other valuable consideration to a person for selling, soliciting or negotiating insurance in this state if that person is not duly licensed as required under this chapter.
2. A person shall not accept a commission, service fee or other valuable consideration for selling, soliciting or negotiating insurance in this state if that person is not duly licensed as required under this chapter.
3. Renewals or other deferred commissions may be paid to a person for selling, soliciting or negotiating insurance in this state if that person was duly licensed as required under this chapter at the time of the sale, solicitation or negotiation.
4. An insurer or insurance producer may pay or assign commissions, service fees or other valuable consideration to any person, regardless of whether that person is licensed as a producer, unless the payment or assignment would violate a specific section of title 41, Idaho Code, including, but not limited to, sections 41-1314 and 41-2708, Idaho Code, or department rule.

§ 41-1018. Appointments.

1. An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer. An insurance producer who is not acting as an agent of an insurer is not required to become appointed.
2. To appoint a producer as its agent, the appointing insurer shall file, in a format approved by the director, a notice of appointment within fifteen (15) days from the date the agency contract is executed or the first insurance application is submitted.
3. Upon receipt of the notice of appointment, the director shall verify, within a reasonable time not to exceed thirty (30) days, that the insurance producer is eligible for appointment. If the insurance producer is determined to be ineligible for appointment, the director shall notify the insurer within five (5) days of his determination.

§ 41-1019. Notification to director of termination.

1. An insurer or authorized representative of the insurer that terminates the appointment, employment, contract or other insurance business relationship with a producer shall notify the director within thirty (30) days following the effective date of the termination, using a format prescribed by the director, if the reason for termination is one of the reasons set forth in section 41-1016, Idaho Code, or the insurer has knowledge that the producer was found by a court, governmental body or self-regulatory organization authorized by law to have engaged in any of the activities set forth in section 41-1016, Idaho Code. Upon the written request of the director, the insurer shall provide additional information, documents, records or other data pertaining to the termination or activity of the producer.
2. An insurer or authorized representative of the insurer that terminates the appointment, employment, contract or other insurance business relationship with a producer for any reason not set forth in section 41-1016, Idaho Code, shall notify the director within thirty (30) days following the effective date of the termination, using a format prescribed by the director. Upon written request of the director, the insurer shall provide additional information, documents, records or other data pertaining to the termination.
3. The insurer or authorized representative of the insurer shall promptly notify the director in a format acceptable to the director if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the director in accordance with subsection (1) of this section.
4. A copy of any notification shall be provided to the producer as follows:
   1. Within fifteen (15) days after making the notification required by subsections (1), (2) and (3) of this section, the insurer shall mail a copy of the notification to the producer at his or her last known address. If the producer is terminated for cause for any other reasons listed in section 41-1016, Idaho Code, the insurer shall provide a copy of the notification to the producer at his or her last known address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier.
   2. Within thirty (30) days after the producer has received the original or additional notification, the producer may file written comments concerning the substance of the notification with the director. The producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer, and the comments shall become a part of the director’s file and shall accompany every copy of a report distributed or disclosed for any reason about the producer as permitted under subsection (6) of this section.
5. Immunities.
   1. In the absence of actual malice, an insurer, the authorized representative of the insurer, a producer, the director, or an organization of which the director is a member and that compiles information and makes it available to other insurance directors or regulatory or law enforcement agencies, shall not be subject to civil liability, and a civil cause of action of any nature shall not arise against these entities or their respective agents or employees as a result of any statement or information required by or provided pursuant to this section or any information relating to any statement that may be requested in writing by the director from an insurer or producer or as a result of any statement by a terminating insurer or producer to an insurer or producer limited solely and exclusively to whether a termination for cause under subsection (1) of this section was reported to the director, provided that the propriety of any termination for cause under subsection (1) of this section is certified in writing by an officer or authorized representative of the insurer or producer terminating the relationship. (b) In any action brought against a person that may have immunity under paragraph (a) of this subsection for making any statement required by this section or providing any information relating to any statement that may be requested by the director, the party bringing the action shall plead specifically in any allegation that paragraph (a) of this subsection does not apply because the person making the statement or providing the information did so with actual malice.
6. Confidentiality.
   1. Any documents, materials or other information obtained by the director in an investigation pursuant to this section shall be exempt from public disclosure under chapter 1, title 74, Idaho Code.
   2. In order to assist in the performance of the director’s duties under this chapter, the director:
      1. May share documents, materials or other information, including confidential and privileged documents and materials or information subject to paragraph (a) of this subsection, with other state, federal and international regulatory agencies and law enforcement authorities, and with the national association of insurance commissioners, its affiliates or subsidiaries, provided that the recipient agrees to maintain the confidentiality and privileged status of the documents, materials or other information;
      2. May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the national association of insurance commissioners, its affiliates or subsidiaries and from regulatory agencies and law enforcement authorities of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any documents, materials or information received with notice or with the understanding that they are confidential or privileged under the laws of the jurisdiction that is the source of the documents, materials or information; and
      3. May enter into agreements governing sharing and use of information consistent with this subsection.
   3. No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the director under this section or as a result of sharing as authorized in paragraph (b) of this subsection.
   4. Nothing in this chapter shall prohibit the director from releasing final adjudicated actions, including for cause terminations that are open to public inspection pursuant to chapter 1, title 74 and title 41, Idaho Code, to a database or other clearinghouse service maintained by the national association of insurance commissioners or its affiliates or subsidiaries.

(c) Paragraph (a) or (b) of this subsection shall not abrogate or modify any existing statutory or common law privileges or immunities.

§ 41-1020. Reciprocity.

1. The director shall waive any requirements, except the requirements imposed by section 41-1009, Idaho Code, for a nonresident producer license applicant with a valid license from his or her home state if the applicant’s home state awards nonresident licenses to residents of this state on the same basis.
2. A nonresident producer’s satisfaction of his or her home state’s continuing education requirements for licensed insurance producers shall constitute satisfaction of this state’s continuing education requirements if the nonresident producer’s home state recognizes the satisfaction of its continuing education requirements imposed upon producers from this state on the same basis.

§ 41-1021. Reporting of actions.

1. A producer shall report to the director any administrative action taken against the producer in another jurisdiction or by another governmental agency within thirty (30) days of the final disposition of the matter. This report shall include a copy of the order, consent order or other relevant legal documents.
2. Within thirty (30) days of the initial pretrial hearing date, a producer shall report to the director any criminal prosecution of the producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents.

§ 41-1022. Insurers must accept business through licensed producers only.

1. No authorized insurer shall make, write, place or cause to be made, written or placed in this state any policy, duplicate policy, or insurance contract of any kind, covering a subject of insurance resident, located or to be performed in this state through any person who is not then licensed as a producer under this chapter.
2. The director may penalize, suspend or revoke the certificate of authority of any insurer violating this section in accordance with section 41-327(1), Idaho Code.

§ 41-1023. Countersignature of policies — Power of attorney.

1. When the signature or countersignature of a property or casualty producer is required on an insurance contract, or rider or endorsement thereto, the producer shall, except as provided in section 41-337(1), Idaho Code, and subsection (2) of this section, affix his original written signature thereon.
2. The property or casualty producer may grant a power of attorney in writing to an individual who is twenty-one (21) years of age or older, authorizing such person to countersign or cause a facsimile of the agent’s signature to be placed on policies and endorsements in his name and on his behalf. The power of attorney shall be acknowledged by the agent under oath before a notary public and shall be kept on file in the agent’s office.

§ 41-1024. Reporting and accounting for premiums.

1. All fiduciary funds received or collected by a producer shall be trust funds received by the producer in a fiduciary capacity, and the producer shall, in the applicable regular course of business, account for and pay the same to the person entitled to the funds. The producer shall establish a separate account for funds belonging to others in order to avoid a commingling of such fiduciary funds with his own funds. The producer may deposit and commingle in such separate account all fiduciary funds so long as the amount of such deposit so held for all other persons is reasonably ascertainable from the records and accounts of the producer. A producer who duly collects and deposits funds into a sweep account maintained by or for the benefit of an applicable insurer shall not be deemed to be in violation of the fiduciary fund account requirement. The director may promulgate rules relating to accounting for and handling of fiduciary funds and the fiduciary fund account.
2. Fiduciary funds shall include all funds collected by an insurance producer from or on behalf of a client or premium finance company that are to be paid to an insurance company, its agents, or the producer’s employer, and all funds collected by an insurance producer from an insurance company or its agents that are to be paid to a policyholder or claimant under any contract of insurance.
3. Any producer who, not being lawfully entitled thereto, diverts or appropriates to his own use such trust or fiduciary funds or any portion thereof, whether or not such funds have been separately deposited, shall upon conviction be guilty of a felony.

§ 41-1025. Rules.

The director may, in accordance with section 41-211, Idaho Code, promulgate reasonable rules as are necessary or proper to carry out the purposes of this chapter.

§ 41-1026. Procedure following suspension, revocation, denial — Reinstatement.

1. Upon suspension, revocation, or refusal to continue any license, the director shall notify the licensee as provided in section 41-212(3), Idaho Code, and, in the case of a producer who holds appointments from insurers, shall give like notice to the insurers represented.
2. Suspension, revocation, or refusal of any one (1) license held by the licensee under title 41, Idaho Code, shall automatically suspend, revoke or refuse continuation of all other licenses held by the licensee under title 41, Idaho Code.
3. The director shall not issue a license under title 41, Idaho Code, to or as to any person whose license has been revoked or continuance refused until after the expiration of not less than one (1) year, to a maximum of five (5) years, from the date of such revocation or refusal, which time period shall be set forth in the final order, or, if judicial review of such revocation or refusal is sought, not less than one (1) year, to a maximum of five (5) years, from the date of a final court order or decree affirming the revocation or refusal. If no time period is specified in the final order or final court order or decree, the time period shall be one (1) year. In the event the former licensee again files an application for a license under title 41, Idaho Code, the director may require the applicant to show good cause why the prior revocation or refusal to continue his license shall not be deemed a bar to the issuance of a new license.
4. The director shall not issue a license under title 41, Idaho Code, to any person whose application for a license was previously denied until after the expiration of one (1) year from the date of such license denial or, if judicial review of such license denial is sought, one (1) year from the date of a final court order or decree affirming the license denial.

§ 41-1027. Return of license.

1. All licenses, although issued and delivered as to the licensee producer, adjuster or surplus lines broker, shall at all times be the property of the state of Idaho. Upon any expiration, termination, suspension or revocation of the license, the licensee or other person having possession or custody of the license shall deliver it to the director either by personal delivery or by mail.
2. In the case of any license that is lost, stolen or destroyed while in the possession of a licensee or other person, the director may, in lieu of the return of the license, accept the affidavits of the licensee or other person responsible for or involved in the safekeeping of such license concerning the facts of the loss, theft or destruction.

§ 41-1028. Inactive status.

1. Any individual producer who does not want to actively continue in the business of insurance may apply for inactive status of his license on forms prescribed by the director. The director, in his discretion, may grant or deny the application for inactive status and shall notify the licensee of this decision in writing. Inactive status of a license, once granted, shall apply to all licenses held by the licensee and shall continue in force until reactivated pursuant to this section or until the license is suspended or revoked pursuant to this chapter.
2. During the period that a licensee remains on inactive status, the licensee may not transact the business of insurance in this state or engage in any other insurance activity which requires an active license. A licensee on inactive status may, subject to the terms of an insurer’s contract with the licensee, continue to receive commissions or other compensation relative to business written by such licensee during active license status.
3. Any individual producer whose license is placed on inactive status shall be exempt from compliance with continuing education requirements.
4. An individual producer whose license is placed on inactive status shall be subject to payment of the applicable continuation fees.
5. An individual producer whose license is on inactive status may apply for reactivation of a license on forms prescribed by the director. The request for reactivation shall include proof of completion of twenty (20) hours of continuing education earned during the twelve (12) months prior to reactivation or proof that the producer has retested and met the examination requirements as to any line or kind of insurance to be transacted under the reactivated license. The director, in his discretion, may grant or deny the application for reactivation.

§ 41-1029. Severability.

If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

§ 41-1030. Producer compensation.

1. For purposes of this section:
   1. “Consumer” means an insured, a prospective insured or an employer group.
   2. “Retail producer” means a producer who solicits, negotiates with or sells an insurance contract directly to a consumer.
   3. “Wholesale producer” means a producer who solicits, negotiates or sells an insurance contract directly with a retail producer, but not with a consumer.
2. Notwithstanding any other provision of title 41, Idaho Code, and as provided in this subsection, retail producers and wholesale producers may charge a fee or be compensated by a combination of fees and commissions.
   1. Before charging a fee to a consumer, a retail producer shall provide to the consumer a written statement that describes the services the retail producer will perform and the fees the retail producer will receive. Acceptance by the consumer of a fee arrangement shall be evidenced by the consumer signing and dating the fee statement.
   2. Before charging a fee to a retail producer, a wholesale producer shall provide to the retail producer a written statement that describes the services the wholesale producer will perform and the fees the wholesale producer will receive. Information regarding the amount of the fees charged by the wholesale producer shall be disclosed in writing on the face of the policy as a separately itemized charge.

§ 41-1031 — 41-1035. Agents, brokers and consultants — License required as to a particular insurer — Compensation — Exceptions to license requirement — Purpose of license — License for “controlled business” prohibited — Qualifications — Agents or brokers — Qualifications — Consultants. [Repealed.]

§ 41-1036. Records.

1. A producer holding a license under this chapter shall make available through his principal place of business complete records of transactions placed through or countersigned by the producer.
2. Records as provided in subsection (1) of this section shall include, but not be limited to:
   1. The names and addresses of insurer and insured;
   2. The number and expiration date of the policy or contract;
   3. The premium payable as to the policy or contract;
   4. The date, time, insurer, insured and coverage of every binder made by the producer;
   5. All disclosures made by a producer to an insured or to a prospective insured; and
   6. Such other information as the director may reasonably require.
3. The records shall be kept available for inspection by the director for at least five (5) years after the creation or the completion, whichever is later, of the respective transactions. The records may be maintained off-site and in electronic form if the records can be made available for inspection through the producer’s principal place of business upon reasonable notice by the director.

§ 41-1037. Requirements for bail agents — Findings — Purpose.

1. Sections 41-1037 through 41-1045, Idaho Code, provide requirements for the regulation of bail agents in this state in addition to the requirements generally applicable to producers under this chapter.
2. The legislature finds that:
   1. Bail agents provide an important local retail service to the retail consumers of bail bonds;
   2. Retail consumers of bail bonds and bail agents require a uniform and consistent regulatory framework that governs retail bail practices; and
   3. There is a need to provide consumer protection from unscrupulous and unfair practices.
3. The purpose of this chapter is to provide that the department shall uniformly and exclusively license bail agents throughout the state of Idaho and that the department shall regulate such agents and bail transactions, provided the supreme court shall retain its inherent authority to regulate the transaction of bail with the court, including promulgating rules and uniform guidelines.

§ 41-1038. Definitions.

As used in sections 41-1037 through 41-1045, Idaho Code:

1. “Bail” means a monetary amount required by the court to release the defendant from custody and to ensure his appearance in court as ordered.
2. “Bail agent” means a person who is a licensed producer in the line of surety insurance that is authorized by an insurer to execute or countersign undertakings of bail in connection with judicial proceedings.
3. “Bail bond” means a financial guarantee, posted by a bail agent and underwritten by a surety insurance company, that the defendant will appear as ordered.
4. “Collateral” means property of any kind given as security to obtain a bail bond.
5. “Department” means the department of insurance.
6. “Director” means the director of the department of insurance.
7. “Person” means an individual or a business entity.
8. “Retail consumers of bail bonds” means a defendant and any person who provides collateral to obtain any portion of a bail bond.
9. “Surety” or “surety insurance company” means an admitted insurer authorized in the line of surety pursuant to title 41, Idaho Code.

§ 41-1039. License required.

1. No person shall hold himself out to be a bail agent or sell, solicit, negotiate, advise or consult regarding the terms of bail bond contracts in this state unless that person is licensed as a producer in the line of surety insurance. The director is vested with the exclusive authority to license bail agents and the authority to regulate the solicitation, negotiation and transaction of bail with retail consumers of bail bonds, provided however, that a court retains the authority to refuse to accept bail bonds from a surety or a bail agent pursuant to its inherent authority, pursuant to Idaho Code, or as provided by supreme court rules, guidelines or appellate decisions.
2. A bail agent is authorized to execute and countersign undertakings of bail, including bail bonds, in connection with any judicial proceedings in each of the judicial districts of the state. Any sheriff or clerk of the district court shall accept bail bonds only from a bail agent, unless otherwise ordered by the court pursuant to subsection (1) of this section.
3. In addition to the authority to revoke, suspend or refuse to issue a bail agent’s license pursuant to section 41-1016, Idaho Code, the director shall suspend a license for a period not to exceed six (6) months, after mailing notice to the last known address of the bail agent but prior to a hearing, if such bail agent:
   1. Has been convicted or has entered a guilty plea to any felony or to a misdemeanor evidencing theft, dishonesty, intimidation, threats, or violence; or
   2. Intentionally and fraudulently makes a false statement to a court in connection with a bail transaction.
4. In addition to the provisions of subsection (3) of this section, the director may also suspend a license for a period not to exceed six (6) months, after mailing notice to the last known address of the bail agent but prior to a hearing, for reasons set forth in the rules of the department.

§ 41-1039A. Notice.

In the event that the director revokes or suspends a bail agent’s license or a surety’s certificate of authority, or lifts such revocation or suspension, the director shall immediately notify all judicial district trial court administrators and all sureties with whom the agent is appointed of the effective date of such revocation or suspension or of the lifting of such revocation or suspension.

§ 41-1040. Bond required.

After January 1, 2004, a producer shall not act as a bail agent unless the producer first files with the department and thereafter maintains in force a surety performance bond, executed by an authorized surety insurer, in favor of the director in the amount of fifteen thousand dollars ($15,000). Such bond shall be held in trust for the benefit and protection of the public against a judicial or administrative determination by the department of loss by acts of fraud or dishonesty by the bail agent.

§ 41-1041. Records.

1. The bail agent shall provide copies of the bail contract, premium receipts, collateral receipts, and any related documents to the defendant and any cosigner at the time of the bail transaction.
2. In addition to the records set forth in section 41-1036, Idaho Code, a bail agent shall also maintain complete records pertaining to any collateral received and any charges collected for any bail bond transaction for at least five (5) years after the liability of the surety has been terminated.

§ 41-1042. Collections and charges permitted.

1. Notwithstanding any other provision of this chapter, a bail agent in any bail transaction shall not, directly or indirectly, charge or collect money or other valuable consideration from any person except for the following:
   1. To pay premiums at the rates established by the insurer;
   2. To provide collateral;
   3. To reimburse the bail agent for actual expenses incurred in connection with the bail transaction, limited to the following:
      1. Expenditures actually and reasonably incurred to verify underwriting information or to pay for notary public fees, recording fees, or necessary long distance telephone or telegram fees; provided however, that the total of all such expenditures reimbursed shall not exceed fifty dollars ($50.00); and
      2. Travel expenses incurred more than twenty-five (25) miles from a bail agent’s place of business, which includes any city or locality in which the bail agent advertises or engages in bail business, up to the amount allowed by the internal revenue service for business travel for the year in which the travel occurs.
2. Except as permitted under this section, a bail agent shall not make any charge for his service in a bail transaction and the bail agent shall fully document all expenses for which the bail agent seeks reimbursement.

§ 41-1043. Collateral.

1. A bail agent may accept collateral in connection with the bail bond transaction if the collateral is not excessive in relation to the face amount of the bond.
2. All collateral received by a bail agent is received in a fiduciary capacity.
   1. Collateral received in the form of cash must be deposited and maintained in a trust account that is separate and apart from any other funds or assets of the bail agent.
   2. Collateral other than cash must be maintained in a separate and secure location apart from the assets of the bail agent.
3. Collateral received must be returned to the person who deposited the collateral with the bail agent within fourteen (14) days of the date notice is received that the obligation, the satisfaction of which was secured by collateral, is discharged.
4. A copy of the order of the court wherein the bail or undertaking was ordered exonerated shall be deemed prima facie evidence of exoneration or termination of the liability.
5. If a bail agent accepts collateral, the bail agent shall give a written receipt for the collateral to the person from whom the collateral was received. The receipt shall include a full and detailed accounting of the collateral received.

§ 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.

§ 41-1045. Responsibility for actions of others.

For purposes of licensing and regulation under title 41, Idaho Code, a bail agent is responsible for the actions of the bail agent’s employees, contractors and agents acting on the bail agent’s behalf in relation to bail transactions and matters arising out of bail transactions.

§ 41-1046 — 41-1059. License requirements — Exceptions — Qualifications — Application — Examination — Exemption — Contents — Continuation — Expiration — Agents — Brokers. [Repealed.]

§ 41-1060 — 41-1068. Sale of insurance by vending machines — Licensed agents and brokers — Payment and sharing commissions. [Repealed.]

§ 41-1069. [Reserved.]

§ 41-1072. Consultants

Combined licensing. [Repealed.]

§ 41-1073 — 41-1080. Consultants — Sharing commissions — Nonresident — Change of address — Administrative penalty — Suspension, revocation or refusal of license — Reinstatement. [Repealed.]

§ 41-1081. Requirements for sale of portable electronics insurance — Findings — Purpose.

1. Sections 41-1081 through 41-1089, Idaho Code, set forth requirements for the sale of portable electronics insurance in this state.
2. The legislature finds that portable electronics insurers and insurance producers who sell, solicit or negotiate the offer or sale of such insurance in this state shall be supervised and regulated by the department of insurance in a uniform and consistent manner.

§ 41-1082. Definitions.

As used in sections 41-1081 through 41-1089, Idaho Code:

1. “Customer” means a person who purchases portable electronics or services.
2. “Enrolled Customer” means a customer who purchases coverage under a portable electronics insurance policy issued to a vendor of portable electronics, which vendor would be the insured under a master or group policy.
3. “Location” means any physical location in the state of Idaho or any website, call center site or similar location directed to residents of the state of Idaho.
4. “Portable electronics” means electronic devices that are portable in nature and includes accessories and any services related to the use of such device.
5. 1. “Portable electronics insurance” means insurance providing coverage for the repair or replacement of portable electronics against any one (1) or more of the following causes of loss: loss of the portable electronic device, theft, inoperability due to mechanical failure, malfunction, damage or other similar causes of loss; (5)(a) “Portable electronics insurance” means insurance providing coverage for the repair or replacement of portable electronics against any one (1) or more of the following causes of loss: loss of the portable electronic device, theft, inoperability due to mechanical failure, malfunction, damage or other similar causes of loss;
   2. “Portable electronics insurance” does not include:
      1. A service contract as defined in section 41-114A, Idaho Code;
      2. A policy of insurance covering a seller’s or a manufacturer’s obligations under a warranty; or
      3. A homeowner’s, renter’s, private passenger automobile, commercial multi-peril or similar insurance policy.
6. “Portable electronics transaction” means:
   1. The sale or lease of portable electronics by a vendor to a customer; or
   2. The sale of a service related to the use of portable electronics by a vendor to a customer.
7. “Supervising entity” means a business entity that is a licensed insurer or insurance producer that is authorized by an insurer to supervise the administration of a portable electronics insurance program.
8. “Vendor” means a person in the business of engaging in portable electronics transactions directly or indirectly.

§ 41-1083. Licensure of vendors.

1. A vendor is required to hold a limited lines license to sell or offer coverage under a policy of portable electronics insurance.
2. A limited lines license issued pursuant to the provisions of this section shall authorize any employee or authorized representative of the vendor to sell or offer coverage under a policy of portable electronics insurance to a customer at each location at which the vendor engages in portable electronics transactions.
3. The supervising entity shall maintain a registry of vendor locations that are authorized to sell or solicit portable electronics insurance coverage in this state. Upon request by the director to the supervising entity, the registry shall be open to inspection and examination by the director during regular business hours of the supervising entity.
4. Notwithstanding any other provision of law, a limited lines license issued pursuant to this section shall authorize the licensee and its employees or authorized representatives to engage in those activities that are permitted in this section.

§ 41-1084. Requirements for sale of portable electronics insurance.

1. At every location where portable electronics insurance is offered or sold to customers, brochures or other written materials must be provided by the vendor to a prospective customer which:
   1. Disclose that portable electronics insurance may duplicate coverage already provided by a customer’s homeowner’s insurance policy, renter’s insurance policy or other source of insurance coverage;
   2. State that the purchase by the customer of a portable electronics insurance policy is not required in order to purchase or lease portable electronics or related services;
   3. Summarize the material terms of the insurance coverage, including:
      1. The identity of the insurer;
      2. The identity and contact information of the supervising entity;
      3. The amount of any applicable deductible and how it is to be paid;
      4. Benefits of the insurance coverage; and
      5. Key terms and conditions of the insurance coverage such as whether portable electronics may be repaired or replaced with similar make and model, reconditioned or nonoriginal manufacturer parts or equipment;
   4. Set forth the process for filing a claim, including a description of how to return portable electronics and any deadlines applicable thereto, any fees that may apply and the maximum fee applicable in the event the customer fails to comply with any equipment return requirements; and
   5. State that an enrolled customer may cancel enrollment for coverage under a portable electronics insurance policy at any time and that the person who paid the premium shall receive a pro rata refund or credit of any applicable unearned premium.
2. The director may order a vendor to stop using any brochure or other written material that violates the requirements of this section or is otherwise found to be misleading or false.
3. Portable electronics insurance may be offered on a month to month or other periodic basis as a group or master commercial inland marine policy issued to a vendor of portable electronics for its enrolled customers.
4. Eligibility and underwriting standards for customers electing to purchase portable electronics insurance coverage shall be established for each portable electronics insurance program by the insurer issuing a policy to a vendor.

§ 41-1085. Authority of vendors of portable electronics.

1. Notwithstanding any other provision of law, the employees and authorized representatives of vendors may sell or offer portable electronics insurance to customers and shall not be subject to licensure as an insurance producer under the provisions of this chapter provided that:
   1. The vendor obtains a limited lines license to authorize its employees or authorized representatives to sell or offer portable electronics insurance pursuant to the provisions of this section;
   2. The insurer issuing the portable electronics insurance either directly supervises or appoints a supervising entity who shall supervise the administration of the program, to include development of a training program for employees and authorized representatives of the vendors concerning the applicable requirements of this chapter prior to the transaction of any personal electronics insurance. The training required by the provisions of this section shall comply with the following:
      1. The training shall be delivered to employees and authorized representatives of a vendor who are directly engaged in the activity of selling or offering portable electronics insurance;
      2. The training may be provided in electronic form. However, if conducted in an electronic form, the supervising entity shall implement a supplemental education program regarding the portable electronics insurance product being offered or sold that is conducted and overseen by employees of the supervising entity that are licensed pursuant to this chapter;
      3. Each employee and authorized representative shall receive basic instruction concerning the portable electronics insurance offered to customers and the disclosures required pursuant to section 41-1084, Idaho Code; and
   3. No employee or authorized representative of a vendor of portable electronics shall advertise, represent or otherwise hold himself out as a limited lines or other licensed insurance producer.

§ 41-1086. Responsibility for actions of others.

For purposes of licensing and regulation under title 41, Idaho Code, a portable electronics limited lines licensee shall be responsible for the actions of the licensee’s employees and authorized representatives acting on the licensee’s behalf in relation to portable electronics insurance transactions and matters arising out of the same. Any violation of this chapter by the licensee’s employees and authorized representatives acting on the licensee’s behalf shall be considered a violation by the licensee.

§ 41-1087. Suspension or revocation of license.

If a vendor of portable electronics or its employee or authorized representative violates any applicable provision of this chapter including, but not limited to, section 41-1016, Idaho Code, or applicable provisions of chapter 13, title 41, Idaho Code, or an applicable rule, the director may:

1. Impose an administrative penalty pursuant to section 41-117, Idaho Code. However, penalties arising from the same or similar conduct shall not exceed fifty thousand dollars ($50,000) in the aggregate; and
2. Impose other penalties that the director deems necessary and reasonable, including:
   1. Prohibiting such vendor from transacting portable electronics insurance pursuant to the provisions of this section at specific business locations where violations have occurred or from using specific employees or representatives in the transaction of portable electronics insurance; and
   2. Suspending, revoking or refusing to renew the license of such vendor.

§ 41-1088. Termination of portable electronics insurance.

Notwithstanding any other provision of law:

1. An insurer may terminate or otherwise change the terms and conditions of a policy of portable electronics insurance only upon providing the policyholder and enrolled customers with at least thirty (30) days’ notice.
2. If the insurer changes the terms and conditions, then the insurer shall provide the vendor policyholder with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure or other evidence indicating that a change in the terms and conditions has occurred and a summary of material changes. An enrolled customer shall be entitled to reject any change to the terms and conditions or cancel coverage, and the person who paid the premium shall receive a pro rata refund or credit of any applicable unearned premium within sixty (60) days of the receipt of notice from the customer that he wishes to cancel coverage.
3. Notwithstanding subsection (1) of this section, an insurer may terminate an enrolled customer’s enrollment under a portable electronics insurance policy upon fifteen (15) days’ notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim thereunder.
4. Notwithstanding subsection (1) of this section, an insurer may immediately terminate an enrolled customer’s enrollment under a portable electronics insurance policy:
   1. For nonpayment of premium;
   2. If the enrolled customer ceases to have an active service with the vendor of portable electronics; or
   3. If an enrolled customer exhausts the aggregate limit of liability under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within thirty (30) calendar days after exhaustion of the limit. However, if notice is not timely sent, enrollment shall continue notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer and specifies the date of such termination.
5. Where a portable electronics insurance policy is terminated by a policyholder, the policyholder shall mail or deliver written notice to each enrolled customer advising the enrolled customer of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered to the enrolled customer at least thirty (30) days prior to the termination, and any unearned premium shall be returned to the policyholder within sixty (60) days of such termination.
6. An enrolled customer may cancel enrollment for coverage under a portable electronics insurance policy at any time, and the person paying the premium shall receive a pro rata refund or credit of any applicable unearned premium within sixty (60) days of the receipt of notice of cancellation from the customer.
7. Whenever notice or correspondence with respect to a policy of portable electronics insurance is required pursuant to the provisions of this section or is otherwise required by law, it shall be in writing and sent within the required notice period, if any, specified within the statute or regulation requiring the notice or correspondence. Notwithstanding any other provision of law, notices and correspondence may be sent either by mail or by electronic means if agreed to by the customer pursuant to section 28-50-105, Idaho Code, and as set forth in this subsection. If the notice or correspondence is mailed, it shall be sent to the vendor of portable electronics at the vendor’s mailing address specified for such purpose and to each affected enrolled customer’s last known mailing address on file with the insurer. The insurer or vendor of portable electronics, as the case may be, shall maintain proof of mailing in a form authorized or accepted by the United States postal service or other commercial mail delivery service. If the notice or correspondence is sent by electronic means, it shall be sent to the vendor of portable electronics at the vendor’s electronic mail address specified for such purpose and to each affected enrolled customer’s last known electronic mail address as provided by each enrolled customer to the insurer or vendor of portable electronics at the time of purchase of the portable electronics insurance coverage. For purposes of this subsection, an enrolled customer’s provision of an electronic mail address to the insurer or vendor of portable electronics shall be deemed consent to receive notices and correspondence by electronic means at such address as long as notice of that consent is provided to the customer within thirty (30) days or less by mail or electronic means. The insurer or vendor of portable electronics shall maintain proof that the notice or correspondence was sent. (8) Notice or correspondence required by this section or otherwise required by law may be sent on behalf of an insurer or vendor by the supervising entity appointed by the insurer.

§ 41-1089. Application for license and fees.

1. A sworn application for a limited lines license to sell, solicit or negotiate portable electronics insurance shall be completed and filed with the department of insurance on forms prescribed by the director to include such information as the director deems necessary.
2. The application shall:
   1. Provide the name, residence address and other information required by the director for an employee or officer of the vendor that is designated by the applicant as the person responsible for the vendor’s compliance with the requirements of this chapter, which designation shall satisfy the requirements of section 41-1007(2)(b), Idaho Code. However, if the vendor derives more than fifty percent (50%) of its revenue from the sale of portable electronics insurance, the information noted in this subsection shall be provided for all officers, directors, and shareholders of record having beneficial ownership of ten percent (10%) or more of the vendor;
   2. Provide the location of the applicant’s home office, both street address and mailing address, and phone number where such applicant may be reached during regular business hours; and
   3. Provide the syllabus for the training program that is developed by the supervising entity or the insurer that issued the portable electronics insurance policy to the vendor.
3. Any vendor engaging in portable electronics insurance transactions on or before the effective date of sections 41-1081 through 41-1089, Idaho Code, must apply for licensure within ninety (90) days of the application being made available to the vendor by the director. Any applicant commencing operations after the effective date of sections 41-1081 through 41-1089, Idaho Code, must obtain a license prior to offering or selling portable electronics insurance.
4. Notwithstanding any other provision of law, applicants for licensure pursuant to sections 41-1081 through 41-1089, Idaho Code, whose home state does not issue a producer license with a similar line of authority as the license authorized by such sections shall be issued a portable electronics limited lines license upon satisfying all applicable requirements of this chapter. However, any licensee whose home state does not authorize a limited lines license for portable electronics insurance in its home state after July 1, 2014, or such later date as may be determined by the director, shall obtain a property and casualty license under title 41, Idaho Code, or its license shall terminate in Idaho. For the purposes of this subsection, “home state” means the District of Columbia and any state or territory of the United States except Idaho, or any province of Canada, in which an applicant maintains such person’s principal place of residence or principal place of business.
5. Initial licenses issued pursuant to sections 41-1081 through 41-1089, Idaho Code, shall be valid for a period of twenty-four (24) months and expire thereafter unless renewed by the director upon completion of forms required by the director and payment of fees consistent with the provisions of this chapter.

§ 41-1090. Short title.

Sections 41-1090 through 41-1096, Idaho Code, shall be known and may be cited as the “Limited Lines Travel Insurance Act.”

§ 41-1091. Definitions.

As used in this chapter:

1. “Designated responsible producer” means the individual licensed producer responsible for ensuring compliance by the limited lines travel insurance producer with travel insurance laws and rules of the state, as set forth in section 41-1092(2)(c), Idaho Code.
2. “Limited lines travel insurance producer” means a person who is a limited lines producer as defined in section 41-1003, Idaho Code.
3. “Offer and disseminate” means providing general information, including a description of the coverage and price, as well as processing the application, collecting premiums and performing other activities permitted by the state.
4. “Travel insurance” means insurance coverage for personal risks incident to planned travel including, but not limited to:
   1. Interruption or cancellation of a trip or event;
   2. Loss of baggage or personal effects;
   3. Damages to accommodations or rental vehicles; and
   4. Sickness, accident, disability or death occurring during travel.
5. “Travel retailer” means a business entity that makes, arranges or offers travel services and may offer and disseminate travel insurance as a service to its customers on behalf of and under the direction of a limited lines travel insurance producer.

“Travel insurance” does not include major medical plans that provide comprehensive medical protection for travelers with trips lasting six (6) months or longer, including those working overseas as an expatriate or military personnel being deployed.

§ 41-1092. Requirements for limited lines travel insurance producers.

Notwithstanding any other provision of law:

1. The director may issue to an individual or business entity that has filed with the director an application, in a form and manner prescribed by the director, a limited lines travel insurance producer license that authorizes the limited lines travel insurance producer to sell, solicit or negotiate travel insurance on behalf of a licensed insurer.
2. A travel retailer may offer and disseminate travel insurance under a limited lines travel insurance producer’s business entity license only if the following conditions are met:
   1. The limited lines travel insurance producer provides to policyholders of travel insurance:
      1. A description of the material terms or the actual material terms of the insurance coverage;
      2. A description of the process for filing a claim;
      3. A description of the review or cancellation process for the travel insurance policy, including any forfeiture fees; and
      4. The identity and contact information of the insurer and limited lines travel insurance producer.
   2. At the time of licensure, the limited lines travel insurance producer shall establish and maintain a register on a form prescribed by the director of each travel retailer that offers travel insurance on the limited lines travel insurance producer’s behalf. The register shall be maintained and updated annually, at a minimum, by the limited lines travel insurance producer and shall include the name, address, and contact information of the travel retailer and an officer or person who directs or controls the travel retailer’s operations, as well as the travel retailer’s federal tax identification number. The limited lines travel insurance producer shall submit such register from the previous year to the department on March 1 of each year. The limited lines travel insurance producer shall also certify that the registered travel retailer complies with 18 U.S.C. 1033. The limited lines travel insurance producer shall report its Idaho annual written premium to the director on an annual basis.
   3. The limited lines travel insurance producer has designated one (1) of its employees, who is a licensed individual producer, as a designated responsible producer who shall be responsible for the limited lines travel insurance producer’s compliance with the travel insurance laws, rules and regulations of the state.
   4. The designated responsible producer, president, secretary, treasurer and any other officer or person who directs or controls the limited lines travel insurance producer’s insurance operations shall comply with the fingerprinting requirements applicable to insurance producers in the resident state of the limited lines travel insurance producer.
   5. The limited lines travel insurance producer has paid all applicable insurance producer licensing fees as set forth in applicable state law.
   6. The limited lines travel insurance producer requires each employee and authorized representative of the travel retailer whose duties include offering and disseminating travel insurance to receive a program of instruction or training that shall be subject to review by the director. The training material shall, at a minimum, contain instructions on the types of insurance offered, ethical sales practices and required disclosures to prospective customers.
3. Any travel retailer offering or disseminating travel insurance shall make available to prospective purchasers brochures or other written materials that:
   1. Provide the identity and contact information of the insurer and the limited lines travel insurance producer;
   2. Explain that the purchase of travel insurance is not required in order to purchase any other product or service from the travel retailer; and
   3. Explain that an unlicensed travel retailer is permitted to provide general information about the insurance offered by the travel retailer, including a description of the coverage and price, but is not qualified or authorized to answer technical questions about the terms and conditions of the insurance offered by the travel retailer or to evaluate the adequacy of the customer’s existing insurance coverage.
4. A travel retailer’s employees or authorized representatives who are not licensed as insurance producers may not:
   1. Evaluate or interpret the technical terms, benefits and conditions of the offered travel insurance coverage;
   2. Evaluate or provide advice concerning a prospective purchaser’s existing insurance coverage; or
   3. Hold himself or itself out as a licensed insurer, licensed producer or insurance expert.

§ 41-1093. Registration required.

A travel retailer, whose insurance-related activities and those of its employees and authorized representatives are limited to offering and disseminating travel insurance, on behalf of and under the direction of a limited lines travel insurance producer meeting the conditions stated in this chapter, is authorized to do so and receive related compensation upon registration by the limited lines travel insurance producer as described in section 41-1092(2)(b), Idaho Code.

§ 41-1094. Type of policy.

Travel insurance may be provided under an individual policy or under a group or master policy.

§ 41-1095. Responsibility of limited lines travel insurance producers.

As the insurer designee, the limited lines travel insurance producer is responsible for the acts of the travel retailer and shall use reasonable means to ensure compliance by the travel retailer with this chapter.

§ 41-1096. No negative option or opt out.

No person offering travel insurance on an individual or group basis may do so using a negative option or option to opt out, that would require a consumer to take an affirmative action to deselect coverage such as unchecking a box on an electronic form when purchasing a trip. It shall not be an unfair trade practice to include blanket travel insurance coverage with the purchase of a trip, provided the coverage is not marketed as free.

§ 41-1097. Enforcement.

The limited lines travel insurance producer and any travel retailer offering and disseminating travel insurance under the limited lines travel insurance producer license shall be subject to the provisions of section 41-1016, Idaho Code, and other applicable provisions of this title. Violations of this act shall be considered an unfair trade practice under chapter 13, title 41, Idaho Code.

§ 41-1101. Scope of chapter.

This chapter applies only as to adjusters, as defined in section 41-1102[, Idaho Code].

§ 41-1102. “Adjuster” defined.

1. An “adjuster” is a person who, on behalf of the insurer, for compensation as an independent contractor or as the employee of such an independent contractor, or for fee or commission, investigates and negotiates settlement of claims arising under insurance contracts.
2. None of the following is an “adjuster” for the purposes of this chapter:
   1. A licensed attorney at law who is qualified to practice law in this state.
   2. The salaried employee of an authorized insurer, or group of such insurers under common control or ownership, or of a managing general agent, who adjusts losses for such insurer or insurers or for the authorized insurers represented by the general agent.
   3. The licensed agent of an authorized insurer who, at the insurer’s request, from time to time adjusts or assists in adjustment of losses arising under policies issued by such insurer.
   4. An individual who collects claim information from, or furnishes claim information to, claimants or those who are insured and who conducts data entry, including entering data into an automated claims adjudication system, provided that the individual is an employee of a licensed adjuster or its affiliate where no more than twenty-five (25) such persons are under the supervision of one (1) licensed adjuster or licensed agent. A licensed agent who acts as a supervisor or adjusts claims pursuant to the provisions of this paragraph is not required to also be licensed as an adjuster. For purposes of this section, “automated claims adjudication system” means a pre-programmed computer system designed for the collection, data entry, calculation and final resolution of portable electronics insurance claims that:
      1. May only be utilized by a licensed adjuster, licensed agent or supervised individuals operating pursuant to the provisions of this paragraph;
      2. Must comply with all claims payment requirements of the insurance code; and
      3. Must be certified as compliant with this section by a licensed adjuster who is an officer of a licensed business entity pursuant to the provisions of this chapter.

§ 41-1103. License required.

No person shall in this state be, act as, or advertise or hold himself out to be, an adjuster unless then licensed as an adjuster under this chapter. No resident of Canada may be licensed as a resident adjuster or may designate Idaho as his home state, unless such person has successfully passed the adjuster examination and has complied with the other applicable provisions of this chapter. No resident of Canada may be licensed as a nonresident adjuster unless such person has obtained a resident or home state adjuster license in another state.

§ 41-1104. Qualifications for adjuster’s license.

1. Except as provided in subsection (2) of this section, the director shall not issue, continue, or permit to exist any license as an adjuster as to any person not qualified therefor as follows:
   1. Must be a natural person not less than twenty-one (21) years of age.
   2. Must be trustworthy, and be of good character and reputation as to morals, integrity, and financial responsibility, and must not have been convicted of any crime that is deemed relevant in accordance with section 67-9411(1), Idaho Code.
   3. Must be a salaried employee of a licensed adjuster, or must have had experience or special education or training as to the investigation and settlement of loss of claims under insurance contracts of sufficient duration and extent reasonably to satisfy the director as to his competence to fulfill the responsibilities of an adjuster.
   4. If required by the director, must pass a written examination to test his knowledge of the duties and responsibilities of an adjuster and of matters involved in transactions under an adjuster’s license. The examination shall be subject to the same applicable provisions as apply pursuant to title 41, Idaho Code, to examinations for license as insurance agent.
2. A firm or corporation, whether or not organized under the laws of this state, may be licensed as an adjuster if each individual who is to exercise the license powers in this state is separately licensed, or is named in the firm or corporation license, and is qualified as for an individual license as adjuster under subsection (1) of this section. An additional full license fee shall be paid as to each individual in excess of one (1) so named in the firm or corporation license to exercise its powers.

§ 41-1105. Application for license.

The individual desiring to be licensed as an adjuster shall make written application therefor to the director, on forms as prescribed and furnished by the director. The application shall be accompanied by payment of the fee for the license as set forth by rule pursuant to section 41-401, Idaho Code.

§ 41-1106. Scope of license.

Under his license an adjuster shall have authority to act as adjuster on behalf of the insurer only as to losses under insurance contracts.

§ 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.

§ 41-1108. Other provisions applicable.

The following sections of chapter 10, title 41, Idaho Code, shall, to the extent so applicable, also apply as to adjuster licenses:

1. 41-1007(1), Idaho Code (application for producer license).
2. 41-1008, Idaho Code (producer license).
3. 41-1011, Idaho Code (issuance, refusal of license).
4. 41-1013, Idaho Code (continuation, expiration of license, continuing education statement).
5. 41-1016, Idaho Code (administrative penalty — suspension, revocation, refusal of license).
6. 41-1026, Idaho Code (procedure following suspension, revocation, denial — reinstatement).
7. 41-1027, Idaho Code (return of license).

§ 41-1201. Representing or aiding unauthorized insurer prohibited.

1. No person shall in this state directly or indirectly act as agent for, or otherwise represent or aid on behalf of another, any insurer not then authorized to transact such insurance in this state, in the solicitation, negotiation, procurement or effectuation of insurance or annuity contracts, or renewal thereof, or forwarding of applications for insurance, or in the dissemination of information as to coverage or rates, or inspection of risks, or fixing of rates, or investigation or adjustment of claims or losses, or collection or forwarding of premiums, or in any other manner represent or assist such an insurer in the transaction of insurance with respect to subjects of insurance resident, located or to be performed in this state.
2. This section does not apply to:
   1. Matters authorized to be done by the director under the unauthorized insurers process act, sections 41-1204 through 41-1210[, Idaho Code].
   2. Surplus line insurance when written pursuant to the surplus line law, sections 41-1211 through 41-1232[, Idaho Code], and coverages specified in section 41-1212[, Idaho Code] (exemptions from surplus line law).
   3. Any transaction with respect to which the insurer is not required to have a certificate of authority pursuant to section 41-306[, Idaho Code,] (exceptions to certificate of authority requirement).
   4. A licensed adjuster or attorney at law representing such an insurer from time to time in his professional capacity.

§ 41-1202. Representing or aiding unauthorized insurer prohibited — Penalty.

Any person who violates section 41-1201[, Idaho Code,] shall upon conviction thereof be guilty of a misdemeanor punishable by a fine of not to exceed two thousand dollars ($2,000) or by imprisonment in the county jail for not to exceed six (6) months, or by both such fine and imprisonment in the court’s discretion; except, that the court shall increase the amount of any fine so levied by the full amount of any compensation accruing or to accrue to the violator by reason of the acts out of which the violation arose. Each instance of violation shall be considered a separate offense for the purposes of this section.

§ 41-1203. Suits by unauthorized insurer prohibited.

1. No unauthorized insurer shall institute or file, or cause to be instituted or filed, any suit, action or proceeding in this state to enforce any right, claim or demand arising out of any insurance transaction in this state.
2. This section does not apply as to:
   1. Transactions permitted under section 41-306[, Idaho Code,] (exceptions to certificate of authority requirement).
   2. Coverages exempted from the surplus line law under section 41-1212[, Idaho Code].
   3. Counter claim, cross complaint, or similar action by an insurer in connection with a suit brought against the insurer in which service of process on the insurer was made under the unauthorized insurers process act, sections 41-1204 through 41-1210[, Idaho Code].

§ 41-1204. Unauthorized insurers process act — Title — Interpretation.

1. Sections 41-1204 through 41-1210[, Idaho Code,] constitute and may be cited as the unauthorized insurers process act.
2. Such act shall be so interpreted as to effectuate its general purpose to make uniform the law of those states which enact it.

§ 41-1205. Purpose of process act.

The purpose of the unauthorized insurers process act is to subject certain insurers to the jurisdiction of courts of this state in suits by or on behalf of insureds or beneficiaries under insurance contracts.

The legislature declares that it is a subject of concern that many residents of this state hold policies of insurance issued or delivered in this state by insurers while not authorized to do business in this state, thus presenting to such residents the often insuperable obstacle of resorting to distant forums for the purpose of asserting legal rights under such policies. In furtherance of such state interest, the legislature herein provides a method of substituted service of process upon such insurers and declares that in so doing it exercises its power to protect its residents and to define, for the purpose of this statute, what constitutes doing business in this state, and also exercises powers and privileges available to the state by virtue of Public Law 15, 79th Congress of the United States, chapter 20, 1st session, S. 340, which declares that the business of insurance and every person engaged therein shall be subject to the laws of the several states.

§ 41-1206. Acts constituting director as process agent.

Any of the following acts in this state, effected by mail or otherwise, by an unauthorized foreign or alien insurer, is equivalent to and shall constitute an appointment by such insurer of the director to be its true and lawful attorney, upon whom may be served all lawful process in any action, suit or proceeding instituted by or on behalf of an insured or beneficiary arising out of any such contract of insurance, and any such act shall be signification of its agreement that such service of process is of the same legal force and validity as personal service of process in this state upon such insurer:

1. The issuance or delivery of contracts of insurance to residents of this state or to corporations authorized to do business therein.
2. The solicitation of applications for such contracts.
3. The collection of premiums, membership fees, assessments, or other consideration for such contract, or
4. Any other transaction of insurance business.

§ 41-1207. How process is served — Default judgment.

1. Such service of process shall be made as provided for in section 41-334(1)[, Idaho Code], and:
   1. The director shall forthwith mail by registered mail one (1) of the copies of such process to the defendant at its last known principal place of business, and shall keep a record of all processes so served upon him.
   2. Such service of process is sufficient, provided (i) notice thereof and (ii) a copy of the process, are sent to the defendant at its last known principal place of business, by the plaintiff or the plaintiff’s attorney, by registered mail within ten (10) days thereafter, and provided that on or before the date the defendant is required to appear, or within such further time as the court may allow, there shall be filed with the clerk of the court in which such action is pending (i) the defendant’s receipt of registration, or receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and (ii) the affidavit of the plaintiff or plaintiff’s attorney showing a compliance herewith.
2. Service of process in any such action, suit or proceeding shall, in addition to the manner provided in subsection (1) of this section, be valid if served upon any person within this state who, on behalf of such insurer, is:
   1. Soliciting insurance, or
   2. Making, issuing or delivering any contract of insurance, or
   3. Collecting or receiving any premium, membership fee, assessment or other consideration for insurance; and a copy of such process is sent to the defendant in the same manner as set forth in subsection (1)(b) herein.
3. No plaintiff or complainant shall be entitled to a judgment by default under this section until the expiration of thirty (30) days from the date of the filing of the affidavit of compliance.
4. Nothing contained in this section shall limit or abridge the right to serve any process, notice or demand upon any insurer in any other manner now or hereafter permitted by law.

§ 41-1208. Defense of action by unauthorized insurer.

1. Before any unauthorized foreign or alien insurer shall file or cause to be filed any pleading in any action, suit or proceeding instituted against it, such unauthorized insurer shall:
   1. Deposit with the clerk of the court in which such action, suit or proceeding is pending, cash or securities, or file with such clerk a bond with good and sufficient sureties, to be approved by the court, in an amount determined by the court to be sufficient to secure the payment of any final judgment which may be rendered in such action, provided, however, that the court may in its discretion make an order dispensing with such deposit or bond where the insurer makes a showing satisfactory to such court that it maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in such action, suit or proceeding, and that such insurer will pay any final judgment rendered without requiring suit to be brought on such judgment in the state where such securities are located, or
   2. Procure a certificate of authority to transact the business of insurance in this state.
2. In any action, suit or proceeding in which service is made in the manner provided in section 41-1207[, Idaho Code], the court may, in its discretion, order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of subsection (1) of this section and to defend such action.
3. Nothing in subsection (1) of this section is to be construed to prevent an unauthorized foreign or alien insurer from filing a motion, in accordance with the applicable rules of civil procedure, to quash a writ or to set aside service thereof made in the manner provided in section 41-1207[, Idaho Code], hereof on the ground either:
   1. That such unauthorized insurer has not done any of the acts enumerated in section 41-1206[, Idaho Code], or
   2. That the person on whom service was made pursuant to subsection (2) of section 41-1207[, Idaho Code,] was not doing any of the acts therein enumerated.

§ 41-1209. Unauthorized insurer failing to pay claim — Attorney fees.

In any action against an unauthorized foreign or alien insurer, upon a contract of insurance issued or delivered in this state to a resident thereof, or to a corporation authorized to do business therein, if the insurer has failed for thirty (30) days after demand prior to the commencement of the action to make payment in accordance with the terms of the contract, and it appears to the court that such refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a reasonable attorney fee and include such fee in any judgment that may be rendered in such action. Such fee shall not exceed twelve and one-half per cent (12 ½%) of the amount which the court or jury finds the plaintiff is entitled to recover against the insurer, but in no event shall such fee be less than twenty-five dollars ($25.00). Failure of an insurer to defend any such action shall be deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause.

§ 41-1210. Exemptions from process act.

The provisions of this unauthorized insurers process act shall not apply to any action, suit or proceeding against any unauthorized foreign or alien insurer arising out of any contract of:

1. Reinsurance, ocean marine, aircraft or railway insurance;
2. Insurance effectuated in accordance with the surplus line law or any amendments or supplements thereto;
3. Insurance against legal liability arising out of the ownership, operation or maintenance of any property having a permanent situs outside this state; or
4. Insurance against loss of or damage to any property having a permanent situs outside this state;

Where such contract of insurance contains a provision designating the director or a bona fide resident of Idaho to be the true and lawful attorney of such unauthorized insurer upon whom may be served all lawful process in any action, suit or proceeding instituted by or on behalf of an insured or beneficiary arising out of such contract or where the insurer enters a general appearance in any such suit, action or proceeding.

§ 41-1211. Surplus line law — Short title — Purpose.

1. Sections 41-1211 through 41-1234, Idaho Code, constitute and may be cited as the “surplus line law.”
2. It is declared that the purposes of the surplus line law are to provide orderly access for the insuring public of Idaho to insurers not authorized to transact insurance in this state, through only qualified, licensed, and supervised surplus line brokers licensed in Idaho and under such safeguards for the insured as may be practical, for insurance coverages and to the extent thereof not procurable from authorized insurers; to protect such authorized insurers, which under the laws of Idaho must meet certain standards as to policy forms and rates, from unwarranted competition by unauthorized insurers who, in the absence of this law, would not be subject to similar requirements; and for other purposes as set forth in this law.

§ 41-1212. Exemptions from surplus line law.

1. The provisions of this surplus line law controlling the placing of insurance with unauthorized insurers shall not apply to reinsurance or, except as to subsection (2) below, to the following insurances when so placed by licensed agents or surplus line brokers of this state:
   1. Ocean marine and foreign trade insurances.
   2. Insurance on subjects located, resident, or to be performed wholly outside of this state, or on vehicles or aircraft owned and principally garaged outside this state.
   3. Insurance on operations of railroads engaged in transportation in interstate commerce and their property used in such operations.
   4. Insurance of aircraft owned or operated by manufacturers of aircraft, or of aircraft operated in commercial scheduled interstate flight, or cargo of such aircraft, or against liability, other than worker’s compensation and employer’s liability, arising out of the ownership, maintenance or use of such aircraft.
2. Brokers so placing any such insurance with an unauthorized insurer shall keep a full and true record of each such coverage in detail as required of surplus line insurance under this law. The record shall be preserved for not less than five (5) years from the effective date of the insurance and shall be kept available in this state and open to the examination of the director. The broker shall furnish to the director at his request and on forms as designated and furnished by him a report of all such coverages so placed in a designated calendar year.
3. The following sections apply only when the insured’s home state is Idaho:
   1. Section 41-1214, Idaho Code (conditions for export);
   2. Section 41-1215, Idaho Code (broker’s affidavit);
   3. Section 41-1216, Idaho Code (open lines for export);
   4. Section 41-1217, Idaho Code (eligible surplus lines insurers);
   5. Section 41-1218, Idaho Code (eligible surplus line insurers — penalty for violation);
   6. Section 41-1219, Idaho Code (evidence of the insurance — changes — penalty);
   7. Section 41-1220, Idaho Code (endorsement of contract);
   8. Section 41-1227, Idaho Code (records of broker);
   9. Section 41-1228, Idaho Code (annual report of broker);
   10. Section 41-1229, Idaho Code (tax on surplus lines);
   11. Section 41-1233, Idaho Code (report and tax of independently procured coverages);
   12. Section 41-1234, Idaho Code (records of insureds).

§ 41-1213. Definitions.

As used in this chapter and any applicable rules, the following definitions shall apply:

1. “Affiliated” means, with respect to an insured, any entity that controls, is controlled by or is under common control with the insured.
2. “Affiliated group” means any group of entities that are all affiliated.
3. “Broker” means a surplus line broker duly licensed as such under this chapter, including resident surplus line brokers and nonresident surplus line brokers.
4. “Control” means:
   1. An entity directly or indirectly, or acting through one (1) or more other persons, owns or controls another entity or has the power to vote twenty-five percent (25%) or more of any class of voting securities of another entity; or
   2. An entity controls in any manner the election of a majority of the directors or trustees of another entity.
5. 1. “Exempt commercial purchaser” means any person purchasing commercial insurance who, at the time of placement, meets the following requirements: (5)(a) “Exempt commercial purchaser” means any person purchasing commercial insurance who, at the time of placement, meets the following requirements:
      1. The person employs or retains a qualified risk manager to negotiate insurance coverage.
      2. The person has paid aggregate nationwide commercial property and casualty insurance premiums in excess of one hundred thousand dollars ($100,000) in the immediately preceding twelve (12) months.
      3. The person meets at least one (1) of the following criteria:
         1. The person possesses a net worth in excess of twenty million dollars ($20,000,000) as such amount is adjusted pursuant to the provisions of paragraph (b) of this subsection.
         2. The person generates annual revenues in excess of fifty million dollars ($50,000,000) as such amount is adjusted pursuant to the provisions of paragraph (b) of this subsection.
         3. The person employs more than five hundred (500) full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than one thousand (1,000) employees in the aggregate.
         4. The person is a nonprofit organization or public entity generating annual budgeted expenditures of at least thirty million dollars ($30,000,000) as such amount is adjusted pursuant to the provisions of paragraph (b) of this subsection.
         5. The person is a municipality with a population in excess of fifty thousand (50,000) persons.
      4. If one hundred percent (100%) of the insured risk is located out of state, the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.
   2. The amounts provided in subparagraph (iii)1., 2. and 4. of paragraph (a) of this subsection must be adjusted to reflect the percentage change for the five (5) year period in the consumer price index for all urban consumers published by the bureau of labor statistics of the United States department of labor.
   3. For the purposes of this subsection, “commercial insurance” means property and casualty insurance pertaining to a business, profession, occupation, nonprofit organization or public entity.
6. “Export” means to place in an unauthorized insurer under this surplus line law insurance covering a subject of insurance resident, located, or to be performed in Idaho.
7. 1. “Home state” means: (i) The state in which an insured maintains its principal place of business or, in the case of an individual, the individual’s principal residence; or (7)(a) “Home state” means: (i) The state in which an insured maintains its principal place of business or, in the case of an individual, the individual’s principal residence; or
   2. If more than one (1) insured from an affiliated group are named insureds on a single nonadmitted insurance contract, then “home state” means the home state, as determined pursuant to the provisions of paragraph (a) of this subsection, of the member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract.
   3. For the purposes of this subsection, “principal place of business” means the state where the insured maintains its headquarters and where the insured’s high level officers direct, control and coordinate the business activities of the insured.
8. “Qualified risk manager” means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements:
   1. The person is an employee of, or a third party consultant retained by, the commercial policyholder;
   2. The person provides skilled services in loss prevention, loss reduction or risk and insurance coverage analysis, and purchase of insurance; and
   3. The person:
      1. Has at least ten (10) years of experience in risk financing, claim administration, loss prevention, risk and insurance coverage analysis or purchasing commercial lines of insurance; or
      2. Has a graduate degree from an accredited college or university in risk management, business administration, finance, economics or any other field determined by a state insurance director or other state regulatory official or entity to demonstrate minimum competence in risk management; or
      3. Has at least seven (7) years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis or purchasing commercial lines of insurance and has one (1) of the designations specified in subparagraph (iv)1. through 5. of this paragraph; or
      4. Has a bachelor’s degree or higher education from an accredited college or university in risk management, business administration, finance, economics or any other field determined by a state insurance director or other state regulatory official or entity to demonstrate minimum competency in risk management; and either has three (3) years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis or purchasing commercial lines of insurance, or has one (1) of the following designations:
         1. A designation as a chartered property and casualty underwriter (CPCU) issued by the American institute for CPCU and insurance institute of America;
         2. A designation as an associate in risk management (ARM) issued by the American institute for CPCU and insurance institute of America;
         3. A designation as a certified risk manager (CRM) issued by the national alliance for insurance education and research;
         4. A designation as a RIMS fellow (RF) issued by the global risk management institute; or

§ 41-1214. Conditions for export.

If certain insurance coverages cannot be procured from authorized insurers, such coverages, hereinafter designated “surplus lines,” may be procured from unauthorized insurers, subject to the following conditions:

1. The insurance must be procured through a licensed surplus line broker who is a member of a surplus line association approved by the director.
2. The full amount or kind of insurance required must not be procurable from insurers who are authorized to do business in this state. The amount of insurance exported shall be only the excess over the amount procurable from authorized insurers unless the excess is not available without support of other coverages, provided that a diligent search is made among the insurers authorized to transact and actually writing that particular kind and class of insurance in this state.
3. The insurance must not be so exported for the purpose of securing advantages either as to:
   1. A lower premium rate than would be accepted by an authorized insurer; or
   2. Terms of the insurance contract.
4. A surplus line broker seeking to procure from or place insurance with an unauthorized insurer for an exempt commercial purchaser is not required to satisfy the diligent search requirement set forth in subsection (2) of this section when:
   1. The surplus line broker or referring insurance producer procuring or placing the surplus line insurance has disclosed to the exempt commercial purchaser that such insurance may or may not be available from the admitted market that may provide greater protection with more regulatory oversight; and
   2. The exempt commercial purchaser has subsequently requested in writing the surplus line broker or referring insurance producer to procure or place such insurance from an unauthorized insurer.
5. Records of the surplus line broker’s satisfaction of the requirements of subsection (4) of this section shall be maintained in compliance with the provisions of section 41-1227, Idaho Code.
6. A surplus line broker may not knowingly place surplus line insurance with insurers that are financially unsound. The surplus line broker may only so insure with the following:
   1. Any foreign insurer that is authorized to write the kind of insurance in its domiciliary jurisdiction and has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction that equals the greater of the following: (i) the minimum capital and surplus requirements under the laws of this state; or (ii) fifteen million dollars ($15,000,000); or
   2. Any alien insurer that is listed on the quarterly listing of alien insurers maintained by the international insurers department of the national association of insurance commissioners.
7. The requirements in paragraph (a) of subsection (6) of this section may be satisfied by an insurer that possesses less than the minimum capital and surplus upon an affirmative finding of acceptability by the director. Such finding shall be based upon factors such as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability and company record and reputation within the industry. The director is prohibited from making an affirmative finding of acceptability when the foreign insurer’s capital and surplus is less than four million five hundred thousand dollars ($4,500,000).
8. The director may promulgate rules to prescribe the terms under which the financial requirements provided in this section may be waived in circumstances where insurance cannot be otherwise procured on risks located in this state.
9. For any violation of the provisions of this section, a surplus line broker may be subject to a fine of not less than one hundred dollars ($100) and not more than five thousand dollars ($5,000), or the surplus line broker’s license may be revoked, suspended or nonrenewed, or both such fine and license revocation, suspension or nonrenewal.

§ 41-1215. Broker’s affidavit.

At the time of procuring any such surplus line insurance the broker shall execute an affidavit, in form as prescribed or accepted by the director, setting forth facts from which it can be determined whether such insurance was eligible for export under section 41-1214, Idaho Code. The broker shall file, or cause to be filed, this affidavit with the director within thirty (30) days after the insurance policy is received by the broker.

§ 41-1216. Open lines for export.

1. The director may by order or by rule declare eligible for export generally and without compliance with the provisions of sections 41-1214(2), 41-1214(3) and 41-1215, Idaho Code, any class or classes of insurance coverage or risk which he finds, consistent with the procedural requirements of chapter 52, title 67, Idaho Code, that there is no reasonable or adequate market among authorized insurers either as to acceptance of the risk, contract terms, or premium or premium rate. Any such order shall continue in effect during the existence of the conditions upon which predicated, but subject to earlier termination by the director.
2. The broker shall file with or as directed by the director a memorandum as to each such coverage placed by him in an unauthorized insurer, in such form and context as the director may reasonably require for the identification of the coverage and determination of the tax payable to the state relative thereto.
3. The broker, or a licensed Idaho agent of the authorized insurer, may also place with authorized insurers any insurance coverage made eligible for export generally under subsection (1) of this section and without regard to rate or form filings which may otherwise be applicable as to the authorized insurer. As to coverages so placed in an authorized insurer the premium tax thereon shall be reported and paid by the insurer as required generally under section 41-402, Idaho Code.

§ 41-1217. Eligible surplus lines insurers.

1. A broker shall not knowingly place surplus lines insurance with an insurer that is unsound financially, or that is ineligible under this section.
2. The director shall from time to time compile or approve a list of all surplus lines insurers deemed by him to be eligible currently, and shall cause to be sent a copy of such list to each broker at his office last of record with the director. This subsection shall not be deemed to require the director to determine the actual financial condition or claims practices of any unauthorized insurer; and the status of eligibility, if granted by the director, shall indicate only that the insurer appears to be sound financially and to have satisfactory claims practices, and that the director has no credible evidence to the contrary. While any such list is in effect the broker shall restrict to the insurers so listed all surplus lines business placed by him and a person who independently procures its own insurance pursuant to this chapter for risks located in Idaho shall only purchase surplus line insurance from insurers so listed.
3. An eligible surplus lines insurer shall notify the director of any change to the name of the insurer, its physical or mailing address, or its state of domicile, within sixty (60) days of such change.

§ 41-1218. Eligible surplus line insurers — Penalty for violation.

1. For any violation of section 41-1217, Idaho Code, the broker or a person who independently procures its own insurance shall, upon conviction thereof, be guilty of a misdemeanor punishable as provided in section 41-117, Idaho Code (general penalty).
2. The director may impose an administrative penalty not to exceed fifteen thousand dollars ($15,000), for deposit in the general account [fund] of the state of Idaho, upon any person or entity who transacts or who attempts to transact insurance as a surplus lines insurer in violation of any provision of chapter 12, title 41, Idaho Code. Failure of any such person or entity to pay a fine imposed pursuant to the provisions of this section shall authorize the director to seek enforcement of the fine, and any associated costs and attorney’s fees related to bringing the action, in any district court of this state.

§ 41-1219. Evidence of the insurance — Changes — Penalty.

1. Upon placing a surplus line coverage, the broker shall promptly issue and deliver to the insured evidence of the insurance consisting either of the policy as issued by the insurer or, if such policy is not then available, a certificate showing the description and location of the subject of the insurance, coverage, conditions and term of the insurance, the premium and rate charged and taxes collected from the insured, and the name and address of the insured and insurer. If the direct risk is assumed by more than one insurer, the certificate shall state the name and address and proportion of the entire direct risk assumed by each such insurer.
2. No broker shall issue any such certificate or any cover note, or purport to insure or represent that insurance will be or has been granted by any unauthorized insurer, unless he has prior written authority from the insurer for the insurance, or has received information from the insurer in the regular course of business that such insurance has been granted, or an insurance policy providing the insurance actually has been issued by the insurer and delivered to the insured.
3. If after the issuance and delivery of any such certificate there is any change as to the identity of the insurers, or the proportion of the direct risk assumed by an insurer as stated in the broker’s original certificate, or in any other material respect as to the insurance coverage evidenced by the certificate, the broker shall promptly issue and deliver to the insured a substitute certificate accurately showing the current status of the coverage and the insurers responsible thereunder.
4. If a policy issued by the insurer is not available upon placement of the insurance and the broker has issued and delivered his certificate as hereinabove provided, upon request therefor by the insured the broker shall as soon as reasonably possible procure from the insurer its policy evidencing such insurance and deliver such policy to the insured in replacement of the broker’s certificate theretofore issued.
5. Any surplus line broker who knowingly issues a false certificate of insurance, or who knowingly fails promptly to notify the insured of any material change with respect to such insurance by delivery to the insured of a substitute certificate as provided in subsection (3) of this section, shall upon conviction, be subject to the penalties provided by section 41-117, Idaho Code, or to any greater applicable penalty otherwise provided by law.

§ 41-1220. Endorsement of contract.

Every insurance contract procured and delivered as a surplus lines coverage pursuant to this law shall have stamped upon it, either in red ink with at least ten (10) point bold print or in black ink with at least twelve (12) point bold print, and bear the name of the surplus lines broker who procured it, the following:

“This surplus line contract is issued pursuant to the Idaho insurance laws by an insurer not licensed by the Idaho Department of Insurance. There is no coverage provided for surplus line insurance by either the Idaho Insurance Guaranty Association or by the Idaho Life and Health Insurance Guaranty Association.”

§ 41-1221. Surplus line insurance valid.

Insurance contracts procured as surplus line coverage from unauthorized insurers in accordance with this law shall be fully valid and enforceable as to all parties, and shall be given recognition in all matters and respects to the same effect as like contracts issued by authorized insurers.

§ 41-1222. Liability of insurer as to losses and unearned premiums.

1. As to a surplus line risk which has been assumed by an unauthorized insurer pursuant to this surplus line insurance law, and if the premium thereon has been received by the surplus line broker who placed such insurance, in all questions thereafter arising under the coverage as between the insurer and the insured the insurer shall be deemed to have received the premium due to it for such coverage; and the insurer shall be liable to the insured as to losses covered by such insurance, and for unearned premiums which may become payable to the insured upon cancellation of such insurance, whether or not in fact the broker is indebted to the insurer with respect to such insurance or for any other cause.
2. Each unauthorized insurer assuming a surplus line direct risk under this surplus lines insurance law shall be deemed thereby to have subjected itself to the terms of this section.

§ 41-1223. Licensing of surplus line brokers.

1. Any individual while licensed as a producer licensed for property or casualty insurance who has had at least two (2) years’ experience as a producer for the lines of insurance for which he is seeking to be licensed as a surplus line broker, and who is deemed by the director to be competent and trustworthy with respect to the handling of surplus lines, may be licensed as a surplus line broker.
2. Application for the license shall be made to the director on forms as designated and furnished by the director.
3. The license and continuation fee shall be as set forth by rule pursuant to section 41-401, Idaho Code.
4. The license and licensee shall be subject to the applicable provisions of chapter 10, title 41, Idaho Code (producer licensing).
5. When a national insurance producer database of the national association of insurance commissioners, or other equivalent uniform national database, for the licensure of surplus line brokers is created, the director may participate in such database.

§ 41-1224. Suspension or revocation of broker’s license.

1. The director may suspend or revoke any surplus line broker’s license:
   1. If the broker fails to file his annual report or to remit the tax as required by this law; or
   2. If the broker fails to keep the records, or to allow the director to examine his records in this state as required by this law; or
   3. If the broker knowingly places a surplus line coverage in an insurer that is in unsound financial condition in violation of section 41-1217, Idaho Code; or
   4. For any other applicable cause for which a producer’s license may be suspended or revoked.
2. The procedures provided by chapter 10, title 41, Idaho Code, for suspension or revocation of licenses shall apply to suspension or revocation of a surplus line broker’s license.
3. Upon suspending or revoking the broker’s surplus line license the director shall also suspend or revoke all other licenses of the same individual under this code.
4. No broker whose license has been so suspended or revoked shall again be so licensed until any fines or delinquent taxes owing by him have been paid, nor, in case of revocation, until after expiration of one (1) year from date revocation became final.

§ 41-1225. Broker’s bond. [Repealed.]

§ 41-1226. Acceptance of business from agents.

A licensed surplus line broker may accept and place surplus line business for any insurance agent licensed in this state for the kind of insurance involved, and may compensate the agent therefor.

§ 41-1227. Records of broker.

1. Each broker shall keep in his office a full and true record of each surplus line coverage procured by him, including a copy of each daily report, if any, a copy of each certificate of insurance issued by him, and such of the following items as may be applicable:
   1. Amount of the insurance;
   2. Gross premium charged;
   3. Return premium paid, if any;
   4. Rate of premium charged upon the several items of property;
   5. Effective date of the contract, and the terms thereof;
   6. Name and address of each insurer on the direct risk and the proportion of the entire risk assumed by such insurer if less than the entire risk;
   7. Name and address of the insured;
   8. Brief general description of the property of risk injured and where located or to be performed; and
   9. Other information as may be required by the director.
2. The record shall at all times within five (5) years after issuance of the coverage to which it relates be open to examination in this state by the director.

§ 41-1228. Annual report of broker.

1. Each broker shall on or before the first day of March of each year file with the director a verified report of all surplus line insurance transacted by him during the preceding calendar year.
2. The statement shall be on forms as prescribed and furnished by the director and shall show:
   1. Gross amount of each kind of insurance transacted;
   2. Aggregate gross premiums charged;
   3. Aggregate of returned premiums paid to insureds;
   4. Aggregate of net premiums; and
   5. Additional information as required by the director.

§ 41-1229. Tax on surplus lines.

1. On or before the first day of March of each year, each broker shall remit to the director a tax on the premiums, exclusive of sums collected to cover federal and state taxes and examination fees, on surplus line insurance subject to tax transacted by him with unauthorized insurers during the preceding calendar year as shown by his annual statement filed with the director, and at the rate of one and five-tenths percent (1.5%). Such tax shall be in lieu of all other taxes upon such insurers with respect to the business so reported.
2. For property and casualty insurance other than worker’s compensation insurance, if Idaho is the insured’s home state, then the tax so payable shall be computed upon the entire premium under subsection (1) of this section, without regard to whether the policy covers risks or exposures that are located in Idaho. For all other lines of insurance, if a surplus line policy covers risks or exposures only partially in Idaho, the tax so payable shall be computed upon the proportion of the premium that is properly allocable to the risks or exposures located in Idaho.
3. Each broker shall round to the nearest whole dollar any amount shown or required to be shown on any return, form, statement, or other document submitted to the director or to any entity set forth in rule pursuant to section 41-1232, Idaho Code. Any record or other document prepared or maintained by the director shall express any dollar amount rounded to the nearest whole dollar.

§ 41-1230. Failure to file report or remit tax — Penalty.

If any broker fails to file his annual report, or fails to remit the tax provided by section 41-1229, Idaho Code, prior to the first day of April after the tax is due, he shall be liable for a fine of twenty-five dollars ($25.00) for each day of delinquency commencing with the first day of April. The tax may be collected by distraint, or the tax and fine may be recovered by an action instituted by the director in any court of competent jurisdiction. Any fine collected by the director shall be paid to the state treasurer and credited to the general fund.