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House committee approves introduction of bill to update Life and Health Insurance Guaranty Association
Summary
The Idaho House Business Committee voted to introduce RS31911, a proposal to limit coverage under the Life and Health Insurance Guaranty Association to original policyholders, clarify long‑term care and interest‑rate adjustments, allow certain ACA co‑ops to join, and delegate member fee caps to the association board.
Representative Jeff Ehlers, R‑Meridian, introduced RS31911 to the House Business Committee on Tuesday, saying the draft updates the Life and Health Insurance Guaranty Association statute to reflect current practices and reduce unintended coverage for speculative investors.
Ehlers said the association functions like the FDIC for life and health policies, protecting consumers if an insurer becomes insolvent, and that the proposed rule would “exclude factoring companies from being covered under this act” so the association protects the original policyholder rather than secondary investors. He also said the RS would give the association authority to “roll the interest rate back to a standard rate or a market rate” when insolvent carriers have charged above‑market rates.
The RS would add consumer‑owned co‑ops created under the Affordable Care Act to the list of entities eligible to join the guaranty association, and it would let the association’s board set the cap on member assessments instead of requiring legislative action for future adjustments. “The board is made up of these insurance companies, so I think they’re incentivized not to raise their fees really highly on themselves,” Ehlers said.
Committee members confirmed the association is an independent corporation and asked procedural questions about future hearings. Ehlers said industry experts would testify when the RS is introduced at a bill hearing. Representative Cannon moved to introduce RS31911; the committee voiced approval and the motion carried.
The RS was introduced for drafting; committee members noted a formal bill number will be assigned later and that more technical testimony is expected at the hearing.
