US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 43
                   IDAHO LIFE AND HEALTH INSURANCE GUARANTY
                               ASSOCIATION ACT
    41-4308.  POWERS AND DUTIES OF THE ASSOCIATION. In addition to the powers
and duties enumerated in other sections of this act:
    (1)  If a domestic insurer is an impaired insurer, the association may,
subject to any conditions imposed by the association, other than those which
impair the contractual obligations of the impaired insurer, and approved by
the impaired insurer and the director:
    (a)  Guarantee or reinsure, or cause to be guaranteed, assumed, or
    reinsured, any or all of the covered policies of residents of the impaired
    insurers;
    (b)  Provide such moneys, pledges, notes, guarantees, or other means as
    are proper to effectuate and assure payment of the contractual obligations
    to residents of the impaired insurer pending action under paragraph (a) of
    this subsection;
    (c)  Loan money to the impaired insurer.
    (d)  This chapter shall provide coverage for the policies and contracts
    specified in subsection (1) of this section, for persons who are not
    residents, but only under the following conditions:
         (i)   The insurers which issued such policies or contracts are
         domiciled in this state;
         (ii)  The director has determined that by statute, similar protection
         is not available for such nonresidents as that provided in this
         chapter for residents of this state; and
         (iii) The policy or contract establishing or creating the obligation
         is not a managed care plan.
    (2)  If a domestic insurer is an insolvent insurer, the association shall,
subject to the approval of the director:
    (a)  Guarantee, assume, or reinsure, or cause to be guaranteed, assumed,
    or reinsured the covered policies of residents of the insolvent insurer;
    (b)  Assume payment of the contractual obligations to residents of the
    insolvent insurer; and,
    (c)  Provide such moneys, pledges, notes, guarantees, or other means as
    are reasonably necessary to discharge such duties.
    (d)  This chapter shall provide coverage for the policies and contracts
    specified in subsection (2) of this section, for persons who are not
    residents, but only under the following conditions:
         (i)   The insurers which issued such policies or contracts are
         domiciled in this state;
         (ii)  The director has determined that by statute, similar protection
         is not available for such nonresidents as that provided by this
         chapter for residents of this state; and
         (iii) The policy or contract establishing or creating the obligation
         is not a managed care plan.
    (3)  If a foreign or alien insurer is an insolvent insurer, the
association shall, subject to the approval of the director:
    (a)  Guarantee, assume, or reinsure, or cause to be guaranteed, assumed,
    or reinsured the covered policies of residents;
    (b)  Assure payment of the contractual obligations of the insolvent
    insurer to residents; and
    (c)  Provide such moneys, pledges, notes, guarantees, or other means as
    are reasonably necessary to discharge such duties.
Provided, however, that this subsection shall not apply where the director has
determined that the foreign or alien insurer's domiciliary jurisdiction or
state of entry provides, by statute, protection substantially similar to that
provided by this act for residents of this state.
    (4)  (a) In carrying out its duties under subsections (2) and (3) of this
    section, permanent policy liens, or contract liens may be imposed in
    connection with any guarantee, assumption or reinsurance agreement, if the
    court:
         (i)  Finds that the amounts which can be assessed under this act are
         less than the amounts needed to assure full and prompt performance of
         the insolvent insurer's contractual obligations, or that the economic
         or financial conditions as they affect member insurers are
         sufficiently adverse to render the imposition of policy or contract
         liens, to be in the public interest; and
         (ii)  Approves the specific policy liens or contract liens to be
         used.
    (b)  Before being obligated under subsections (2) and (3) of this section,
    the association may request that there be imposed temporary moratoriums or
    liens on payments of cash values and policy loans in addition to any
    contractual provisions for deferral of cash or policy loan values and such
    temporary moratoriums and liens may be imposed if they are approved by the
    court.
    (5)  If the association fails to act within a reasonable period of time as
provided in subsections (2) and (3) of this section, the director shall have
the powers and duties of the association under this act with respect to
insolvent insurers.
    (6)  The association may render assistance and advice to the director upon
his request, concerning rehabilitation, payment of claims, continuance of
coverage, or the performance of other contractual obligations of any impaired
or insolvent insurer.
    (7)  The association shall have standing to appear before any court in
this state with jurisdiction over an impaired or insolvent insurer concerning
which the association is or may become obligated under this act. Such standing
shall extend to all matters germane to the powers and duties of the
association, including, but not limited to, proposals for reinsuring or
guaranteeing the covered policies of the impaired or insolvent insurer and the
determination of the covered policies and contractual obligations.
    (8)  (a)  Any person receiving benefits under this act shall be deemed to
    have assigned the rights under the covered policy to the association to
    the extent of the benefits received because of this act whether the
    benefits are payments of contractual obligations or continuation of
    coverage. The association may require an assignment to it of such rights
    by any payee, policy or contract owner, beneficiary, insured or annuitant
    as a condition precedent to the receipt of any rights or benefits
    conferred by this act upon such person. The association shall be
    subrogated to these rights against the assets of any insolvent insurer.
    (b)  The subrogation rights of the association under this subsection shall
    have the same priority against the assets of the insolvent insurer as that
    possessed by the person entitled to receive benefits under this act.
    (9)  The contractual obligations of the insolvent insurer for which the
association becomes or may become liable shall be the lesser of:
    (a)  The contractual obligations for which the insolvent insurer would
    have been liable in the absence of an insolvency; or
    (b)  Unless such obligations are reduced as permitted by subsection (4) of
    this section, the aggregate liability of the association shall not exceed
    the following per policy:
         (i)   One hundred thousand dollars ($100,000) in net cash surrender
         in net cash withdrawal values for life insurance, or three hundred
         thousand dollars ($300,000) in life insurance death benefits;
         (ii)  Three hundred thousand dollars ($300,000) in disability
         insurance claims or benefit payments, or one hundred thousand dollars
         ($100,000) in net cash surrender and net cash withdrawal values for
         disability benefits;
         (iii) Three hundred thousand dollars ($300,000) of annuity benefit
         payments for annuities for which periodic annuity benefits, for a
         period of not less than the annuitant's lifetime or for a period
         certain of not less than ten (10) years, have begun to be paid on or
         before the date of the impairment or insolvency, or one hundred
         thousand dollars ($100,000) in annuity net cash surrender or net cash
         withdrawal values; or
         (iv)  Where no coverage limit has been specified for a covered policy
         or benefit, the coverage limit shall be three hundred thousand
         dollars ($300,000).
    (c)  In no event shall the association be liable to expend more than three
    hundred thousand dollars ($300,000) in the aggregate for all benefits,
    including cash values, with respect to any one (1) life.
    (10) The association may:
    (a)  Enter into such contracts as are necessary or proper to carry out the
    provisions and purposes of this act;
    (b)  Sue or be sued, including taking any legal actions necessary or
    proper for recovery of any unpaid assessments under section 41-4309, Idaho
    Code;
    (c)  Borrow money to effect the purposes of this act. Any notes or other
    evidence of indebtedness of the association not in default shall be legal
    investments for domestic insurers and may be carried as admitted assets;
    (d)  Employ or retain such persons as are necessary to handle the
    financial transactions of the association and to perform such other
    functions as become necessary or proper under this act;
    (e)  Negotiate and contract with any liquidator, rehabilitator,
    conservator, or ancillary receiver to carry out the powers and duties of
    the association;
    (f)  Take such legal action as may be necessary to avoid payment of
    improper claims;
    (g)  Exercise, for the purposes of this act and to the extent approved by
    the director, the powers of a domestic life or health insurer, but in no
    case may the association issue insurance policies or annuity contracts
    other than those issued to perform the contractual obligations of the
    impaired or insolvent insurer.