T41CH5

Title 41 > T41CH5

Sections (17)

41-501

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-501. Definitions not mutually exclusive. It is intended that certain insurance coverages may come within the definitions of two (2) or more kinds of insurance as defined in this chapter, and the inclusion of such coverage within one (1) definition shall not exclude it as to any other kind of insurance within the definition of which such coverage is likewise reasonably includable. History: [41-501, added 1961, ch. 330, sec. 110, p. 645.]

41-502

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-502. Life insurance defined. Life insurance is insurance on human lives. The transaction of life insurance includes also the granting of endowment benefits, additional benefits in event of death or dismemberment by accident or accidental means, additional benefits in event of the insured’s disability, and optional modes of settlement of proceeds of life insurance. Life insurance does not include workmen’s compensation coverages. History: [41-502, added 1961, ch. 330, sec. 111, p. 645.]

41-503

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-503. Disability insurance defined. (1) Disability insurance includes: (a) Insurance of human beings against bodily injury, disablement, or death by accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness, and every insurance appertaining thereto. Disability insurance does not include worker’s compensation coverages; and (b) A managed care plan for which a certificate of authority is required pursuant to chapter 39, title 41 , Idaho Code. History: [41-503, added 1961, ch. 330, sec. 112, p. 645; am. 1997, ch. 204, sec. 36, p. 606.]

41-504

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-504. Property insurance defined. Property insurance is insurance on real or personal property of every kind and of every interest therein, whether on land, water, or in the air, against loss or damage from any and all hazard or cause, and against loss consequential upon such loss or damage, other than noncontractual legal liability for any such loss or damage. Property insurance does not include title insurance, as defined in section 41-508 . History: [41-504, added 1961, ch. 330, sec. 113, p. 645.]

41-505

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-505. Marine and transportation insurance defined. Marine and transportation insurance includes: (1) Insurance against any kind of loss or damage to: (a) Vessels, craft, aircraft, cars, automobiles and vehicles of every kind, as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same or during any delays, storage, transshipment, or reshipment incident thereto, including marine builder’s risks and all personal property floater risks, and (b) Person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to the person arising out of the ownership, maintenance or use of automobiles), and (c) Precious stones, jewels, jewelry, gold, silver and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise, and (d) Bridges, tunnels and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage) unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion are the only hazards to be covered; piers, wharves, docks and slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion; other aids to navigation and transportation, including dry docks and marine railways, against all risks. (2) Marine protection and indemnity insurance, meaning insurance against, or against legal liability of the insured for, loss, damage or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair or construction of any vessel, craft or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person. History: [41-505, added 1961, ch. 330, sec. 114, p. 645.]

41-506

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-506. Casualty insurance defined. (1) Casualty insurance includes: (a) Vehicle insurance. Insurance against loss of or damage to any land vehicle or aircraft or any draft or riding animal or to property while contained therein or thereon or being loaded or unloaded therein or therefrom, from any hazard or cause, and against any loss, liability or expense resulting from or incidental to ownership, maintenance or use of any such vehicle, aircraft or animal; and provision of medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to insurance on the vehicle, aircraft or animal. (b) Automobile guaranty. Insurance of the mechanical condition, or freedom from defective or worn parts or equipment, of motor vehicles. (c) Liability insurance. Insurance against legal liability for the death, injury, or disability of any human being, or for damage to property; and provision of medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to liability insurance. (d) Workmen’s compensation. Insurance of the obligations accepted by, imposed upon, or assumed by employers under law for death, disablement, or injury of employees. (e) Burglary and theft. Insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation, or wrongful conversion, disposal, or concealment, or from any attempt at any of the foregoing; including supplemental coverage for medical, hospital, surgical, and funeral expense incurred by the named insured or any other person as a result of bodily injury during the commission of a burglary, robbery, or theft by another; also insurance against loss of or damage to moneys, coins, bullion, securities, notes, drafts, acceptances, or any other valuable papers and documents, resulting from any cause. (f) Personal property floater. Insurance upon personal effects against loss or damage from any cause, under a personal property floater. (g) Glass. Insurance against loss or damage to glass, including its lettering, ornamentation, and fittings. (h) Boiler and machinery. Insurance against any liability and loss or damage to property or interest resulting from accidents to or explosions of boilers, pipes, pressure containers, machinery, or apparatus, and to make inspection of and issue certificates of inspection upon boilers, machinery, and apparatus of any kind, whether or not insured. (i) Leakage and fire extinguishing equipment. Insurance against loss or damage to any pro

41-507

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-507. Surety insurance defined. Surety insurance includes: (1) Fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust. (2) Insurance or guaranty of the obligations of employers under workmen’s compensation laws. (3) Insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings, and contracts of suretyship. (4) Insurance indemnifying banks, bankers, brokers, financial or moneyed corporations or associations against loss, resulting from any cause, of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts or other valuable papers, documents, money, precious metals and articles made therefrom, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, including any loss while the same are being transported in armored motor vehicles, or by messenger, but not including any other risks of transportation or navigation; also insurance against loss or damage to such an insured’s premises or to his furniture, furnishings, fixtures, equipment, safes, and vaults therein, caused by burglary, robbery, theft, vandalism or malicious mischief, or any attempt thereat. History: [41-507, added 1961, ch. 330, sec. 116, p. 645.]

41-508

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-508. Title insurance defined. (1) Title insurance is the certification or guarantee of title or ownership, or insurance of owners of property or others having an interest therein or liens or encumbrances thereon, against loss by encumbrance, or defective titles, or invalidity, or adverse claim to title. This definition shall not be deemed to apply as to the business of preparing and issuing abstracts of, but not certifying, guaranteeing, or insuring, title to or ownership of property or certifying to the validity of documents relative to such title. (2) A title insurer may also insure: (a) The identity, due execution, and validity of any note or bond secured by mortgage or deed of trust; and (b) The identity, due execution, validity and recording of any such mortgage or deed of trust. History: [41-508, added 1961, ch. 330, sec. 117, p. 645.]

41-509

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-509. Limit of risk. (1) No insurer shall retain any risk on any one subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding ten percent (10%) of its surplus to policyholders. (2) A subject of insurance for the purposes of this section, as to insurance against fire and hazards other than windstorm, earthquake and other catastrophic hazards, includes all properties insured by the same insurer which are customarily considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of any other hazard insured against. (3) Reinsurance ceded as authorized by section 41-511 , Idaho Code shall be deducted in determining risk retained. As to surety risks, deduction shall also be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged, or held subject to the surety’s consent and for the surety’s protection. (4) As to alien insurers, this section shall relate only to risks and surplus to policyholders of the insurer’s United States branch. (5) Surplus to policyholders for the purposes of this section, in addition to the insurer’s capital and surplus, shall be deemed to include any voluntary reserves which are not required pursuant to law, and shall be determined from the last sworn statement of the insurer on file with the director, or by the last report of examination of the insurer, whichever is the more recent at time of assumption of risk. (6) This section shall not apply to life or disability insurance, annuities, title insurance, insurance of wet marine and transportation risks, worker’s compensation insurance, employers’ liability coverages, nor to any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy. History: [41-509, added 1961, ch. 330, sec. 118, p. 645; am. 2007, ch. 280, sec. 1, p. 811.]

41-510

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-510. Reinsurance defined. Reinsurance is a contract under which an originating insurer (called the ceding insurer) procures insurance for itself in another insurer (called the assuming insurer or the reinsurer ) with respect to part or all of an insurance risk of the originating insurer. History: [41-510, added 1961, ch. 330, sec. 119, p. 645.]

41-511

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-511. Authorized reinsurance. (1) An insurer may accept reinsurance only of such risks, and retain risk thereon within such limits, as it is otherwise authorized to insure. (2) Except as provided in sections 41-512 , 41-2856 (mergers and consolidations of stock insurers) and 41-2858 , Idaho Code (bulk reinsurance, mutual insurers), an insurer may reinsure all or any part of any particular Idaho risk with an insurer authorized to transact such insurance in this state, or in any other solvent insurer approved or accepted by the director for the purpose of such reinsurance. The director shall not so approve or accept any such reinsurance by a ceding domestic insurer in an unauthorized insurer which he finds for good cause would be contrary to the interests of the policy holders or stockholders of such domestic insurer. The director shall not so approve any foreign reinsurer that possesses surplus as to policy holders in an amount less than that required under section 41-313 , Idaho Code, of a foreign stock insurer authorized to transact in this state the same kind or kinds of insurance as that ceded. (3) Upon request of the director, a ceding insurer shall promptly inform the director in writing of the cancellation or any other material change of any of its reinsurance treaties or arrangements. (4) This section does not apply to marine and transportation insurance. History: [41-511, added 1961, ch. 330, sec. 120, p. 645; 1974, ch. 210, sec. 1, p. 1547; am. 1991, ch. 276, sec. 2, p. 716.]

41-512

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-512. Reinsurance by impaired or withdrawing insurers — Penalty for violation. (1) No authorized insurer whose capital stock (if a stock insurer) or required minimum surplus (if a mutual or reciprocal insurer) is impaired, or which is insolvent, or which is withdrawing from business in this state, shall reinsure its insurance in force on Idaho risks with any insurer not authorized to transact such insurance in this state, until the plan of such reinsurance has been submitted to the director and has been approved by him in writing. (2) The director shall approve such plan of reinsurance unless he finds that one or more of the following grounds for disapproval exist: (a) The proposed reinsurer is in unsound financial condition; or (b) The proposed reinsurance would not provide the Idaho policy holders involved, with reasonably adequate service; or (c) The proposed reinsurer could not qualify for a certificate of authority to transact such insurance in this state; or (d) The proposed reinsurance would be contrary to the interests of such Idaho policy holders. (3) No domestic insurer shall accept reinsurance of all or substantially all of the risks of another insurer unless the plan for such reinsurance has been submitted to and approved by the director, as provided in sections 41-2856 (mergers and consolidations of stock insurers) and 41-2858 (bulk reinsurance, mutual insurers). (4) Upon effectuation of any such reinsurance the reinsurer shall become liable to the insured under the policy for any loss occurring under the policy so reinsured, and shall, within a reasonable time after such effectuation, replace such policies with its own policies, or by endorsement on the original policies acknowledge liability thereunder. In the case of cancelation of such a policy after effectuation of the reinsurance, the reinsurer shall be liable to the insured thereunder for the return premium due. (5) Any person who acts for, or purports to act for, any insurer or reinsurer in violating any of the provisions of this section shall be guilty of a felony and, upon conviction, shall be punished by a fine of not exceeding ten thousand dollars ($10,000) or by imprisonment in the penitentiary for not exceeding ten (10) years, or by both such fine and imprisonment. History: [41-512, added 1961, ch. 330, sec. 121, p. 645.]

41-513

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-513. Share and deposit insurance defined. Share and deposit insurance is that form of contract which guarantees the redemption of shares and deposits in a bank or a savings and loan association to its account holders and/or which guarantees to members of credit unions the redemption of shares, share accounts and deposits in a credit union. History: [41-513, added 1983, ch. 177, sec. 3, p. 485.]

41-514

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-514. purpose. The purpose of sections 41-514 and 41-515 , Idaho Code, is to protect the interest of insureds, claimants, ceding insurers, assuming insurers and the public generally. The legislature hereby declares its intent to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom they owe obligations. In furtherance of that state interest, the legislature hereby provides a mandate that upon the insolvency of a non-United States insurer or reinsurer that provides security to fund its United States obligations in accordance with this chapter, the assets representing the security shall be maintained in the United States, and claims shall be filed with and valued by the state insurance director with regulatory oversight, and the assets shall be distributed, in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurance companies. The legislature declares that the matters contained in this chapter are fundamental to the business of insurance in accordance with 15 U.S.C. 1011 and 1012. History: [41-514, added 2017, ch. 76, sec. 1, p. 197.]

41-515

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-515. Credit for reinsurance. (1) Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of paragraph (a), (b), (c), (d), (e), (f), or (g) of subsection (2) of this section and the requirements of section 41-515A , Idaho Code; provided further, that the director may adopt by rule pursuant to subsection (5)(a) of this section specific additional requirements relating to or setting forth: (a) The valuation of assets or reserve credits; (b) The amount and forms of security supporting reinsurance arrangements described in subsection (5)(a) of this section; and (c) The circumstances pursuant to which credit will be reduced or eliminated. (2) Credit shall be allowed under paragraph (a), (b), or (c) of this subsection only, as respects cessions of those kinds or classes of business which the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. Credit shall be allowed under paragraph (c) or (d) of this subsection only if the applicable requirements of paragraph (h) of this subsection have been satisfied. (a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in this state. (b) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is accredited by the director as a reinsurer in this state. In order to be eligible for accreditation, a reinsurer must: (i) File with the director evidence of its submission to this state’s jurisdiction; (ii) Submit to this state’s authority to examine its books and records; (iii) Be licensed to transact insurance or reinsurance in at least one (1) state or, in the case of a United States branch of an alien assuming insurer, be entered through and licensed to transact insurance or reinsurance in at least one (1) state; (iv) File annually with the director a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement; and (v) Demonstrate to the satisfaction of the director that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement as of the time of its application if it maintains a surplus as regards policyholders in an amount not less than twenty million dollars ($20,000,000) and its accreditation has not been denied by the director within ninety (90) days after submission of its application. (c) Credit shall be allowed when the reinsurance is ceded to an assuming insurer th

41-515A

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-515A. credit for reinsurance procedures. (1) The purpose of this section is to set forth procedural requirements that the director deems necessary to carry out section 41-515 , Idaho Code. The actions and information required under this section are declared to be in the public interest and for the protection of the ceding insurers in this state. (2) Reinsurer licensed in this state. Pursuant to section 41-515 (2)(a), Idaho Code, the director shall allow credit for reinsurance ceded by a domestic insurer to assuming insurers that were licensed in this state as of any date on which statutory financial statement credit for reinsurance is claimed. (3) Accredited reinsurers. (a) Pursuant to section 41-515 (2)(b), Idaho Code, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is accredited as a reinsurer in this state as of the date on which statutory financial statement credit for reinsurance is claimed. An accredited reinsurer must: (i) File a properly executed form AR-1 as evidence of its submission to this state’s jurisdiction and to this state’s authority to examine its books and records; (ii) File with the director a certified copy of a certificate of authority or other acceptable evidence that it is licensed to transact insurance or reinsurance in at least one (1) state or, in the case of a United States branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one (1) state; (iii) File annually with the director a copy of its annual statement filed with the department of its state of domicile or, in the case of an alien assuming insurer, with the state through which it is entered and in which it is licensed to transact insurance or reinsurance, and a copy of its most recent audited financial statement; and (iv) Maintain a surplus as regards policyholders in an amount not less than twenty million dollars ($20,000,000), or obtain the affirmative approval of the director upon a finding that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. (b) If the director determines that the assuming insurer has failed to meet or maintain any of these qualifications, the director may upon written notice and opportunity for hearing suspend or revoke the accreditation. Credit shall not be allowed a domestic ceding insurer under this section if the assuming insurer’s accreditation has been denied or revoked by the director or if the reinsurance was ceded while the assuming insurer’s accreditation was under suspension by the director after notice and hearing. (4) Reinsurer domiciled in another state. (a) Pursuant to section 41-515 (2)(c), Idaho Code, the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer, that as of any date on which sta

41-516

TITLE 41 INSURANCE CHAPTER 5 KINDS OF INSURANCE — LIMITS OF RISK — REINSURANCE 41-516. Individual or group accident and sickness insurance defined. Individual or group accident and sickness insurance means any policy insuring against loss resulting from sickness or from bodily injury or death by accident, or both. Individual or group accident and sickness insurance shall also include comprehensive major medical coverage for medical and surgical benefits and high deductible health plans sold or maintained under the applicable provisions of section 223 of the Internal Revenue Code. History: [41-516, added 2018, ch. 166, sec. 3, p. 341.]