House Business Committee introduces RS 31911 to revise Life and Health Insurance Guaranty Association rules

The House Business Committee on Tuesday voted to introduce RS 31911, a draft statutory rewrite presented by Representative Jeff Ehlers that would update the state's Life and Health Insurance Guaranty Association.

Representative Jeff Ehlers, R.-Meridian, told the committee the guaranty association functions like the FDIC for banks: it protects original policyholders when an insurer becomes insolvent. "They act sort of like the FDIC does for your bank account, where if the bank becomes insolvent, then the consumer is protected," Ehlers said. He said the RS aims to focus protection on original policyholders and to remove coverage for investors who buy policies from those original owners.

The RS would (as described by Ehlers) explicitly exclude factoring or investor-owned purchasers of life…