The Department of Insurance is a regulatory agency created to regulate the business of insurance in Idaho.
State regulation of Idaho’s insurance business began in 1901 and in 1961 the present Department of Insurance was created. When the Executive branch of state government was reorganized in 1974, the Department of Insurance became one of twenty major departments of the Executive branch. The director of the department is appointed by the Governor and is subject to confirmation by the state senate.
The mission of the Department of Insurance is to serve and protect Idahoans by equitably, effectively and efficiently administering the Idaho Insurance Code and the International Fire Code.
The department fulfills its mission and duties through an administrative group and two divisions: The Insurance Division and the State Fire Marshal’s Office. The Insurance Division consists of three regulatory bureaus as indicated below. The Deputy Director oversees the three bureaus and a technology business analyst position.
Support services are provided by an administrative group reporting to the Director. The responsibilities can be summarized as follows:
- Administration: The Director is responsible for the overall policy direction and management of the Department of Insurance. The Director’s administration group includes the Deputy Director, the fiscal section, a public information officer and a human resource specialist for the Department of Insurance. The administration group provides oversight and support to the Insurance Division and the State Fire Marshal.
- Insurance Division:
- Company Activities Bureau: This bureau monitors the financial condition of all insurance entities domiciled in the state of Idaho to assure that each complies with Idaho law and that the financial obligations of the company to its policyholders will be met. The bureau reviews all applications of insurers and qualifying self-funded healthcare plans seeking to do business in this state to determine eligibility for a certificate of authority to transact insurance or eligibility for registration as a self-funded healthcare plan. The bureau also licenses producers and third party administrators.
- Consumer Services Bureau: This bureau researches consumer and industry complaints and provides assistance to consumers and the insurance industry on matters involving insurance contracts and potential violations of the insurance code. This bureau is also responsible for investigating criminal and civil violations of insurance laws, and referring cases involving criminal violations to the Attorney General or appropriate county prosecutor. Also within this bureau is Idaho’s Senior Health Insurance Benefits Advisors (SHIBA) program which provides information, counseling and assistance on Medicare coverage issues to Idaho’s senior citizens through a network of over 100 volunteers and a call center staffed to service our toll-free telephone line.
- Market Oversight Bureau: This bureau reviews insurance policy and self-funded rates and forms. The bureau meets the effective rate review standards for the individual and small group health insurance markets, retaining state-level regulatory authority. The bureau supports the Idaho Health Insurance Exchange in fulfilling the plan management requirements, reviewing and certifying health plans that meet the Qualified Health Plan (QHP) standards. This bureau also regulates title agencies and performs market conduct analyses and examinations of insurers and self-funded plans doing business in Idaho.
- State Fire Marshal:
- The State Fire Marshal’s Office participates in and coordinates an integrated statewide system designed to protect human life from fire and explosions through fire prevention, investigation and public education activities. The program involves fire prevention activities, fire/arson investigations, code enforcement and the operation of the Idaho Fire Incident Reporting System. The State Fire Marshal’s Office provides assistance to local fire agencies throughout the state
Through the National Association of Insurance Commissioners (NAIC), U.S. insurance regulators establish national standards and best practices, conduct peer reviews and coordinate their regulatory oversight to better protect the interests of consumers while ensuring a strong, viable insurance marketplace.
The state of Idaho is part of the U.S. insurance regulatory framework, NAIC, which is a highly coordinated state-based national system designed to protect policyholders and to serve the greater public interest through the effective regulation of the U.S. insurance marketplace. U.S. insurance regulators also participate in the International Association of Insurance Supervisors (IAIS) along with the NAIC by participating in major standard setting initiatives, including working with fellow regulators from around the world to better supervise cross-border insurers, identifying systemic risk in the insurance sector, and creating international best practices.
History of the Department
During the period Idaho was a territory, and after statehood until 1901, insurance companies doing business in Idaho were governed under a special chapter of the State’s general corporations law. After Idaho became a state, it appears the Treasurer was responsible for administering these laws and was the “ex officio Insurance Commissioner.” The Department has an original copy of the Annual Report of the Insurance Commissioner for the year ending April 30, 1900, filed by State Treasurer Lucius C. Rice. As of April 1900, there were 516 companies and 4,565 agents licensed in Idaho.
On March 18, 1901, House Bill 115 was signed into law by the Governor and went immediately into effect. It was titled, “An Act to Provide for an Insurance Commissioner, Defining his Duties and Regulating his Compensation, and to Regulate License Insurance in this State, and to Repeal Existing Laws in Relation Thereto.” This law created the position of Insurance Commissioner to oversee the regulation of insurers in Idaho. The Insurance Commissioner was appointed by the Governor, with the advice and consent of the Senate, and served a two-year term.
The 1901 insurance law was entirely rewritten in 1911. The new law created an Insurance Department as a “distinct department charged with the execution of all laws in relation to insurance companies doing business in this State.” It further provided for the appointment of a State Insurance Commissioner and Deputy Insurance Commissioner, and significantly expanded the insurance code.
In 1919, a law was passed to reorganize the “civil departments” of the State. It took effect on March 31, 1919, and created a new department called the Department of Commerce and Industry. This law abolished the Insurance Department and the offices of the Insurance Commissioner and Deputy Insurance Commissioner, and vested their powers in the newly formed Department of Commerce and Industry. This act also created the Department of Finance.
The Department of Commerce and Industry created in 1919 turned out to be short-lived. Two years later, effective March 15, 1921, a law was passed that abolished the Department of Commerce and Industry and transferred its rights, powers and duties to the Department of Finance. That bill granted to the Department of Finance and its Commissioner the power to execute the laws relating to insurance and insurance companies. After this reorganization, the Director of Insurance and the Manager of State Industrial Insurance became officers overseeing bureaus under the Finance Commissioner. This arrangement lasted for the next 36 years.
On July 7, 1947, a law went into effect recreating the Office of Commissioner of Insurance. The 1947 law transferred the insurance regulatory powers of the Commissioner of Finance and the Director of Insurance to the Commissioner of Insurance – in effect, going full circle back to the 1901 arrangement. In 1961, the insurance code was again rewritten and provided for a Department of Insurance and Commissioner of Insurance. In 1974, the Commissioner of Insurance was changed to Director.
- 1901 – 1911: Insurance Commissioner created
- 1911 – 1919: Department of Insurance, Insurance Commissioner & Deputy Insurance Commissioner
- 1919 – 1921: Department of Commerce and Industry
- 1921 – 1947: Department of Finance with Insurance Director overseeing Bureau of Insurance
- 1947 – 1961: Office of Insurance Commissioner
- 1961 – 1974: Department of Insurance, Commissioner of Insurance
- 1974 – Department of Insurance, Director