Department of Insurance updates JFAC on PBM oversight, 1332 waiver, wildfire risks and proposed mitigation pool

The Joint Finance Appropriations Committee on Jan. 21 heard a budget presentation from the Idaho Department of Insurance that covered pharmacy benefit manager oversight, the state’s federal 1332 waiver and high‑risk reinsurance, and growing wildfire pressures on the homeowner insurance market.

Noah Peterson, a budget and policy analyst with the Legislative Services Office, presented the Department of Insurance’s fiscal history and enhancement requests. The department has 75.5 full‑time positions approved; its two dedicated funds are the Arson Fire and Fraud Prevention Fund (for the State Fire Marshal) and the Insurance Administrative Fund (for licensing, examinations and investigations). Peterson told the committee the department reverted just under $2.2 million in fiscal 2024 and that personnel accounted for about 69.3% of the department’s 2024 expenditures.

Dean Cameron, director of the Idaho Department of Insurance, told senators and representatives that implementation of last year’s PBM reform (House Bill 596) is underway but that the agency has not yet compiled a full public count of complaints. "She's receiving numerous complaints," Cameron said of the new staff member assigned to PBM oversight, and added that most PBMs have submitted data in the required format while a few have not.

Cameron described the state’s use of a federal Section 1332 waiver and a high‑risk reinsurance pool as factors that have helped lower individual market premiums and expand carrier participation on the exchange. "We instituted that 3 years ago ... and since then we've had a reduction in individual health insurance rates each year," Cameron said. He explained that Idaho’s high‑risk pool functions like reinsurance: insurers cede some high‑cost claims identified by CPT code and the pool helps pay those claims, which spreads risk and can hold down premiums.

Committee members pressed Cameron about wildfire‑related market stress. He said rising catastrophic losses, inflation and reinsurance price increases nationwide have tightened the property market and that some carriers have reduced operations or nonrenewed policies in parts of Idaho. Cameron said Idaho burned "just under a million acres" this season, and that the state lost more than 140 structures, including about 40 residences. He said the department is proposing legislation to create a pool with two primary functions: (1) help homeowners harden properties against wildfire risk (for example, clearing eaves and vegetation), and (2) provide a mechanism to help insurers remain in the Idaho market.

The department’s 2026 enhancement requests include one staff actuary (budgeted at $201,900 with $198,900 ongoing), a regulatory compliance specialist (requested at $41.03 per hour, 80% of policy for pay grade O), compensation increases for the State Fire Marshal and deputies ($48,100 ongoing from the Arson Fire and Fraud Prevention Fund) and $162,200 in one‑time capital outlay for fire turnouts ($10,000), cameras ($16,200) and two medium‑duty pickup trucks equipped with canopies ($136,000).

Cameron said the surplus lines (non‑admitted) market has more than doubled in policy volume and noted that surplus lines carry fewer consumer protections. He told the committee the department is closely monitoring solvency and market exits and that it will report more detailed PBM complaint statistics as staff collect and verify data.

The director introduced senior staff present, including Deputy Director Wes Trucksler and fiscal officer Lisa McIntosh. Cameron closed by thanking the committee and said the department stands ready to provide additional information.