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House Business Committee introduces measure to refine Life and Health Insurance Guarantee Association coverage
Summary
The House Business Committee voted Jan. 21 to introduce RS 31911, a draft bill that would adjust Idaho’s Life and Health Insurance Guarantee Association law to exclude factoring companies from coverage, clarify rate corrections for failed insurers, add some ACA-created co-ops as eligible members, and let the association board set member assessments.
Representative Jeff Ehlers (R., District 21, Meridian) presented RS 31911 to the House Business Committee on Jan. 21, 2025, asking the committee to introduce the draft bill to the 2025 session. RS 31911 would amend Idaho’s Life and Health Insurance Guarantee Association framework to narrow who the association protects and to clarify certain technical provisions.
Ehlers told the committee the guarantee association, created in the 1970s, functions like the FDIC for life and health insurance: it helps ensure policyholders are protected if an insurer becomes insolvent. The draft would explicitly exclude “factoring companies” — investors who purchase life policies from original policyholders — from the association’s coverage, preserving protection for original policyholders rather than speculative investors. Ehlers said the change reflects the act’s original design.
The draft also would let the association adjust interest rates on certain policies that a failed insurer had priced above market rates, “rolling the interest rate back” to a standard or market rate if necessary, the presenter said. RS 31911 would add certain Affordable Care Act–created cooperatives to entities eligible to join the guarantee association. Finally, the proposal would remove a statutory cap on member assessments and let the association’s board set member fees without returning to the Legislature for each change, Ehlers said.
Committee members asked clarifying questions about the association’s status and rulemaking authority. Committee chair confirmed the association is an independent corporation, not an agency with administrative rules. Ehlers said industry experts would provide technical assistance during the formal hearing on the introduced bill.
Representative Buchanan moved to introduce RS 31911; the motion passed by voice vote. The committee recorded no roll-call tally in the transcript; the chair said the RS would be assigned a bill number in the coming days and would be heard at the bill hearing stage.
Why this matters: the changes narrow the set of covered claimants and move some administrative discretion from the Legislature to the association’s board, which proponents said will streamline adjustments but may shift oversight of assessment levels to an industry-composed board.
What’s next: RS 31911 was introduced by committee action and will receive a bill number; the committee and sponsor said additional industry witnesses and technical testimony are expected at the bill hearing stage.
