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House Business Committee sends HB38 to floor to expand insurer guarantee association membership and clarify protections
Summary
House Bill 38, which would change provisions of the Life and Health Insurance Guarantee Association, including the inclusion of co‑ops and removal of a cap on membership fees, was sent to the House floor with a due‑pass recommendation after a public hearing and brief testimony from Mountain Health Co‑op.
Representative Jeff Ehlers, R‑21 (Meridian), opened the Feb. 7 public hearing on House Bill 38, saying the bill would amend how the Life and Health Insurance Guarantee Association (the state insurer backstop for policyholders) operates.
Ehlers described four principal changes in the bill: clarifying that the guarantee association is intended to protect original policyholders and not speculative purchasers (for example, factoring companies); confirming the association’s authority to “roll back” interest rates in insolvency situations to industry‑standard levels; including certain Affordable Care Act‑created co‑operatives in the association’s membership; and removing the statutory cap on association membership fees so the association can raise funds to cover operating costs.
“...the first piece, is it clarifies we're gonna not make these factoring companies whole if they bought it speculatively,” Ehlers said. “Additionally, it clarifies on the interest rate rollback... Third thing it does is it includes co ops that were created with the Affordable Care Act originally.”
Bruce Spencer, an attorney and lobbyist for Mountain Health Co‑op, testified in support of the bill. “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 and so we thank the sponsor for bringing the bill and support it,” Spencer said.
After the public‑hearing portion produced no additional speakers, Representative Maher moved to send HB38 to the House floor with a due‑pass recommendation. The committee approved the motion by voice vote.
Members noted that including co‑ops can alter risk in the association pool, which the sponsor acknowledged when he said inclusion “is probably a wise choice then to not include them because they're high risk and make the whole pool riskier. Now this one's lasted for a while, so bring it into the fold.”
