House Business Committee introduces RS31831 to create wildfire insurance mitigation and market-stabilization pool

The House Business Committee on Jan. 15 introduced RS31831, a proposal from the Idaho Department of Insurance to create a mitigation and marketplace-stabilization pool for homeowners affected by wildfire risk. Director Dean Cameron and State Fire Marshal Newt Sandahl briefed the committee on the proposal and answered members’ questions.

The bill would create a board — described by the Department as industry-run with a nonvoting executive seat for the insurance director and a seat for the State Fire Marshal — to administer two primary strategies: (1) grants or grants-like payments to help homeowners “harden” properties against wildfire damage (examples discussed include installing eave screens, replacing roofs and thinning combustible shrubbery) and (2) industry-driven stabilization mechanisms (examples mentioned include deductible buy-downs or other insurer-participation arrangements). Director Dean Cameron told the committee Idaho burned “nearly a million acres” last year and that the state saw structure loss, saying “we lost significant numbers of property 40, excuse me, 140 some structures … of which 41 of them were residences.”

Committee members pressed for fiscal clarity and asked how the pool would be funded. The director described six funding sources discussed in the RS: (1) a prospective diversion of one-quarter of future growth in the state insurance premium tax (the director said the premium tax rate is 1.5% and that the diversion would apply to growth beyond a historical baseline), (2) small, existing cigarette-tax dollars allocated to the State Fire Marshal, (3) excess surplus-lines stamping fees identified in coordination with the Surplus Lines Association, and (4–6) potential industry admission fees or assessments if the board establishes a stabilization mechanism. Cameron said the surplus-lines stamping fees have recently risen as homeowners’ policies have moved into the surplus (nonadmitted) market and that the board would be required to develop “actuarially sound” programs and to contract for actuarial services as needed.

On assessments, Cameron said the provision exists largely as a fiscal control to prevent the board from spending beyond available funds: if board spending exceeded available funds, carriers could be assessed — a standard tool in insurance programs — but industry representatives control the board and thus have an incentive to avoid assessments. Cameron told the committee he did not anticipate immediate assessments but included the language to avoid returning to the legislature for supplemental funding.

Representative Mark Harris (recorded in committee as Representative Harris) asked for detail about funding mechanics; Cameron said some funding sources are small (he cited cigarette-tax receipts in the tens of thousands of dollars) while premium-tax growth and surplus-lines excess could be more material but would depend on market conditions. Representative Birch and others requested written follow-up on projected annual amounts, how grants would be allocated, whether means-testing would apply, and whether the program would cover new builds in high-risk locations or only existing structures.

The committee moved to introduce the RS. The motion carried; three members asked to be recorded as voting no: Representative Harris, Representative Marmon and Representative Raeser.

What’s next: the RS was introduced for formal bill drafting and will return to committee as a bill in later hearings, where members requested more detailed fiscal projections, actuarial assumptions, and grant-selection criteria.