Department of Insurance asks for staff additions, fire-mitigation funding as wildfire and PBM issues rise

The Department of Insurance presented its fiscal year 2026 budget to the Joint Finance-Appropriations Committee on Tuesday, Jan. 21, requesting personnel and equipment additions aimed at actuarial review, regulatory compliance and fire-mitigation response.

Noah Peterson of the Legislative Services Office reviewed the request and told the committee the department seeks four enhancement items for FY2026, including a staff actuary (1 FTP, $201,900 ongoing for personnel and $3,000 one-time office equipment), a regulatory compliance specialist to serve as an internal legal resource (salary requested at 80% of policy for pay grade O), compensation increases for the state fire marshal, chief deputy and deputy fire marshals ($48,100 ongoing from the Arson Fire and Fraud Prevention Fund) and $162,200 in one-time capital outlay for fire-turnout gear, cameras and two medium-duty pickup trucks.

Director Dean Cameron framed the request in the context of broader market stresses. He told the committee that wildfires and catastrophic losses elsewhere — combined with inflation and tightened reinsurance markets — have led some carriers to reduce writing in parts of Idaho or leave state markets altogether. "We had some carriers that were still staying here in Idaho but maybe weren't writing as much business in certain parts of the state, particularly areas where there were more fire prone," Cameron said. He said reinsurance rates have increased and several insurers nationwide are citing solvency and profitability challenges.

Cameron outlined two policy responses the department is pursuing: a proposed pool to finance homeowner hardening and mitigation measures (to reduce wildfire risk to individual structures), and a second function of that pool to help spread risk and retain carriers in the state. He said the department will propose legislation this session to create the pool.

Pharmacy benefit manager oversight: Cameron reported implementation activity following last year's PBM reform (House Bill 596), which took effect Jan. 1. He said the department hired an analyst to handle PBM complaints, has received numerous consumer and pharmacist complaints, and is collecting PBM-submitted data in a required format; "most have complied and have submitted their data," he said, but a few providers have not and the department is working to secure it. The department also received a trailer appropriation in FY2025 to implement HB 596 (1 FTP and $132,400).

Fire response and market effects: Cameron described last year's wildfire season in Idaho as severe (the department reported just under one million acres burned) and said the department lost more than 140 structures, including about 40 residences. He said Idaho has seen growth in the surplus lines market (nonadmitted carriers) and that surplus lines policies often carry fewer consumer protections; that growth is a sign of market strain.

Staffing and operating picture: Peterson said the department has 75.5 authorized full-time positions (63.5 in insurance regulation, 12 in the state fire marshal), and that FY2024 reversions totaled just under $2.2 million. Director Cameron introduced senior staff in the hearing and noted the department had filled nearly all positions. He said the agency is contracting some actuarial work and expects bringing an actuary in-house will save money.

No votes were taken during the presentation. Committee members asked for additional data on PBM compliance and market trends; Cameron said the agency will provide further details as the PBM data collection proceeds and as legislative proposals are finalized.