Department of Insurance briefs JFAC on PBM oversight, wildfire insurance pressures and enhancement requests

The Joint Finance-Appropriations Committee on Jan. 21 heard the Department of Insurance’s budget overview and four enhancement requests for fiscal 2026, along with implementation updates on pharmacy benefit manager (PBM) reporting and the state’s use of a federal Section 1332 waiver.

Noah Peterson of the Legislative Services Office presented the department’s organizational and fund structure. The Department of Insurance has 75.5 approved full‑time positions (63.5 in insurance regulation and 12 in the State Fire Marshal Division). The agency operates two dedicated funds discussed in the presentation: the Arson, Fire and Fraud Prevention Fund (supporting the State Fire Marshal) and the Insurance Administrative Fund (licensing, examinations and investigations). The analyst also outlined premium tax distribution mechanics and showed fiscal trends for premium tax receipts and distributions to the general fund and other entities.

For fiscal 2026 the department requested four enhancement items: (1) a staff actuary (listed as $201,900 ongoing from the Insurance Administrative Fund, with a $3,000 one‑time equipment request); (2) a regulatory compliance/public policy adviser position (presented at $41.3 per hour, 80% of policy for pay grade O); (3) a compensation increase for the State Fire Marshal, chief deputy and deputy fire marshals ($48,100 ongoing from the Arson, Fire and Fraud Prevention Fund, of which $38,100 is salary and $10,000 is variable benefits); and (4) $162,200 in one‑time capital outlay for State Fire Marshal replacements, itemized as $10,000 for fire turnouts, $16,200 for cameras, and $136,000 for two medium‑duty pickup trucks with canopies and bed slides. The presentation also noted a trailer appropriation to implement House Bill 596 (which amended Idaho Code §41‑349): the legislature appropriated one FTP and $132,400 to support PBM reporting and enforcement duties created by that bill.

Director Dean Cameron told committee members the department established a PBM reporting process after enactment of HB 596 and has hired dedicated staff; most PBMs have complied with the required data submission format but a few remain out of compliance and the department is working to obtain their reports. Cameron said the incoming PBM complaint volume is broad — from dispensing fees and contract disputes to non‑responsiveness — and that staff will provide more detailed breakdowns as the agency compiles incoming data.

Cameron also credited the state’s use of a Section 1332 waiver with reducing individual exchange premiums — describing a roughly 20% reduction in one recent year — and said the state’s high‑risk reinsurance pool acts as a backstop that helped attract carriers and hold rates down. He said the waiver and pool have contributed to an increase in carrier participation on Idaho’s exchange.

Committee members asked about wildfire and reinsurance market impacts on home insurance. Cameron described market tightening over several years, including reinsurance cost spikes (one carrier reported reinsurance rates rising by 1,000% for that carrier) and carriers narrowing offerings in high‑risk areas. He said the department is proposing legislation to create a pool to help homeowners harden properties (vegetation management, eave and gutter mitigation) and to spread risk so carriers will continue to offer coverage in Idaho. Cameron said the state saw nearly 1,000,000 acres burned last year and that, unusually for Idaho, that year’s fires produced substantial structure loss (about 140 structures destroyed, roughly 40 residences), which has heightened focus on mitigation and market stability.

No formal votes were taken during the hearing. Director Cameron introduced senior staff members present, including Deputy Director Wes Trexler, State Fire Marshal Newt Sandahl, public information officer Julie Robinson and fiscal officer Lisa McIntosh. The department said most staff work in the office, with limited telecommuting for health reasons.

The department agreed to provide the committee more detailed PBM complaint counts, compliance status for data submissions, and further information on proposed mitigation program design and cost estimates.