Committee advances bill to alter Life and Health Insurance Guarantee Association rules; co-op seeks membership

Representative Jeff Ehlers, District 21 of Meridian, sponsored public hearing on House Bill 38 before the House Business Committee on Feb. 7.

The bill would make four primary changes to the Life and Health Insurance Guarantee Association: clarify that the association’s protections apply to original policyholders rather than speculative buyers such as factoring companies; allow the association to roll back interest rates on contracts where a failing insurer offered higher rates; include certain Affordable Care Act-created co-ops doing business in Idaho in the association’s membership; and remove the statutory cap on membership fees so the association can raise fees to cover operating costs.

"This, is related to the Life and Health Insurance Guarantee Association, 4 things that it does," Representative Jeff Ehlers said, describing the measure. He said the intent is to protect original policyholders and to give the association flexibility on rate rollback and membership rules.

Bruce Spencer, an attorney and lobbyist representing Mountain Health Co-op, testified in support. "The co-op writes insurance for 11,215 folks here in Idaho and we do feel it's appropriate and important that we join the guarantee association," Spencer said.

Representative Maher moved that House Bill 38 be sent to the House floor with a due-pass recommendation. The committee conducted a public hearing; no other members of the public signed up to speak. The committee voted by voice and the motion carried.

Committee members asked for additional details in later hearings, and the bill will proceed to the next stage of the legislative process where regulators, insurers and consumer advocates can provide fuller testimony and any amendments.