Senate panel accepts Industrial Commission workers' compensation chapter rewrite but removes contested "in-state office" language

The Idaho Senate Commerce Committee voted to accept a comprehensive rewrite of the Industrial Commission's workers' compensation administrative chapter while rejecting one subsection that had said carriers must "maintain an office within the state of Idaho."

"My name is Paul Jeffreys from the Industrial Commission. I am pleased to present rule docket 17-0101-2301," Paul Jeffreys told the committee, outlining the rewrite of IDAPA 17.01.01 as part of the governor's 0-based regulation review. Jeffreys said the commission held negotiated-rulemaking sessions with stakeholders, received dozens of public comments, and revised the draft accordingly.

The rewrite had multiple supporters and critics in testimony before the committee. Patty Vaughn, benefits administration manager for the Industrial Commission, described the rewritten rules' adoption of EDI reporting standards maintained by the International Association of Industrial Accident Boards and Commissions, which the commission uses to receive electronic claim data.

Industry and insurance groups urged further narrowing of the contested language. Elizabeth Kreiner of the American Property Casualty Insurance Association asked the panel to strike the subsection that could be read as requiring a brick-and-mortar office, arguing the commission's February 2023 guidance already clarified that an adjuster working from a residence or other in-state location counts as an in-state presence.

Claimant-side representatives asked the committee to preserve protections they said keep adjusting local. Barbara Jordan, director of the Idaho Trial Lawyers Association, said in-state adjusting matters for access and timely hearings and asked the committee to keep protections ensuring prompt claims service.

Local claim administrators warned of an unintended effect if the language were removed. Chris Wagner of Intermountain Claims said the phrase "licensed resident adjuster" can be misleading: an adjuster may hold a designated home-state license and, through reciprocity and licensing fees, be able to work across state lines. Wagner said removing the office-language could risk shifting claims handling out of Idaho.

Committee members debated whether the rule text was redundant with Idaho Code 72-305, which requires sureties to provide prompt claim services through offices or resident adjusters located within the state. Jeffreys and George Gutierrez, director of the Industrial Commission, said the commission interprets the statute broadly and has for decades allowed an adjuster to be located in a private residence so long as adjusting is performed in Idaho.

Senator Foreman moved to approve the rewrite docket 17-0101-2301 while rejecting subsection 305.01.A (the requirement that carriers "maintain an office within the state of Idaho"); the motion was seconded and carried by voice vote. The chair announced the docket was accepted while rejecting 305.01.A.

Jeffreys said the commission retained other provisions requiring an in-state person or an Idaho-licensed adjuster to be authorized to make claim decisions, and the commission retains audit and oversight authority to ensure carriers promptly service claims. The rewrite also removed a sentence requiring offices to be "staffed by adequate personnel to conduct business," a deletion members discussed as potentially vague but consistent with the commission's view that statute requires prompt service.

The commission told the committee the rewrite aims to reduce outdated and duplicative regulation, improve electronic reporting and modernize administrative procedures while maintaining the commission's statutory duty to ensure timely and fair claims handling. The committee adopted the docket with the single subsection modification; the commission will incorporate the committee action into the final rules for formal filing.