Title 41 — INSURANCE

41-2841. Borrowed surplus. (1) A domestic stock or mutual insurer may borrow money to defray the expenses of its organization, provide it with surplus funds, or for any purpose of its business, upon a written agreement that such money is required to be repaid only out of the insu…

41-2842. Participating policies. (1) As provided in its articles of incorporation, a domestic stock insurer or domestic mutual insurer may issue any or all of its policies with or without participation in profits, savings, unabsorbed portions of premiums, or surplus; may classify…

41-2843. Dividends to stockholders. A domestic stock insurer shall not pay any dividend to stockholders except out of earned surplus. Prior to payment thereof, the director, in his discretion, may approve the payment of a dividend from other than earned surplus. For purposes of t…

41-2844. Dividends to policy holders. (1) The directors of a domestic mutual insurer may from time to time apportion any pay or credit to its members dividends only out of that part of its surplus funds which represents net realized savings, net realized earnings, and net realize…

41-2845. Illegal dividends — Penalty. (1) Any director of a domestic stock insurer or domestic mutual insurer who knowingly votes for or concurs in declaration or payment of a dividend to stockholders or policyholders other than as authorized under sections 41-2843 or 41-2844 sha…

41-2846. Contingent liability of mutual members. (1) Except as provided otherwise in section 41-2849 with respect to nonassessable policies, each member of a domestic mutual insurer shall have a contingent liability, pro rata and not one for another, for the discharge of its obli…

41-2847. Levy of contingent liability. (1) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required to be maintained by it under this code for authority to transact the kinds of insurance being transacted, and…

41-2848. Enforcement of contingent liability. (1) The insurer shall notify each member of the amount of the assessment to be paid by written notice mailed to the member’s address last of record with the insurer. Failure of the member to receive the notice so mailed, within the ti…

41-2849. Nonassessable policies — Mutual insurers. (1) A domestic mutual insurer while maintaining unimpaired surplus funds not less in amount than the minimum paid-in capital stock required of a domestic stock insurer formed under this code for authority to transact the same kin…

41-2850. Nonassessable policies — Revocation of authority. (1) The director shall revoke the authority of a domestic mutual insurer to issue policies without contingent liability if (a) At any time the insurer’s assets are less than the sum of its liabilities and the surplus requ…

41-2851. Solicitations in other states. (1) No domestic insurer shall knowingly solicit insurance business in any reciprocating state in which it is not then licensed as an authorized insurer. (2) This section shall not prohibit advertising through publications and radio, televis…

41-2852. Impairment of capital or assets. (1) If the assets of a domestic insurer are less than its liabilities and the minimum amount of capital funds required to be maintained by it under section 41-313, Idaho Code, for authority to transact the kinds of insurance being transac…

41-2853. Assessment of stockholders or members. (1) Any insurer receiving the director’s notice required in section 41-2852(1): (a) If a stock insurer and to the extent that stockholders are subject to assessment under the insurer’s articles of incorporation, by resolution of its…

41-2854. Mutualization of stock insurers. (1) A stock insurer other than a title insurer may become a mutual insurer under such plan and procedure as may be approved by the director after a hearing thereon. (2) The director shall not approve any such plan, procedure or mutualizat…

41-2854A. Mutualization of service corporations. (1) Every corporation organized or existing under chapter 34, title 41, Idaho Code, as a hospital service corporation, a combined professional service and hospital service corporation, or a professional service corporation whose ar…

41-2855. Conversion of mutual insurer to stock insurer. (1) A mutual insurer may become a stock insurer under such plan and procedure as may be approved by the director after a hearing thereon. (2) The director shall not approve any conversion plan or procedure unless: (a) It is …

41-2856. Mergers and consolidations of stock insurers. (1) A domestic stock insurer may merge or consolidate with one or more domestic or foreign stock insurers, or ordinary business corporations having as their principal assets, cash or assets of a character allowed by investmen…

41-2857. Mergers and consolidations of mutual insurers. (1) Except as set forth in section 41-3824, Idaho Code, a domestic mutual insurer shall not merge or consolidate with a stock insurer. (2) A domestic mutual insurer may merge or consolidate with another mutual insurer under …

41-2858. Bulk reinsurance — Mutual insurers. (1) A domestic mutual insurer may reinsure all or substantially all of its business in force, or all or substantially all of a major class thereof, with another insurer, stock or mutual, by an agreement of bulk reinsurance after compli…

41-2859. Mutual member’s share of assets on liquidation. (1) Upon any liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration, shal…

41-2860. Equity securities of domestic stock insurance companies — Statements of ownership. Every person who is directly or indirectly the beneficial owner of more than ten per cent (10%) of any class of any equity security of a domestic stock insurance company, or who is a direc…

41-2861. Recovery of profits resulting from unfair use of information. For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director or officer by reason of his relationship to such company, any profit realized by him …

41-2862. Restrictions on sale of equity securities. It shall be unlawful for any such beneficial owner, director or officer, directly or indirectly, to sell any equity security of such company if the person selling the security or his principal: (a) does not own the security sold…

41-2863. Purchases and sales which are exempt. The provisions of section 41-2861 shall not apply to any purchase and sale, or sale and purchase, and the provisions of section 41-2862 shall not apply to any sale of an equity security of a domestic stock insurance company not then …

41-2864. Foreign or domestic arbitrage transactions exempt. The provisions of sections 41-2860—41-2862 shall not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules and regulations as the director of the department of insurance may adopt…

41-2865. "Equity security" defined. The term "equity security" when used in this act means any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security…

41-2866. Conditions exempting equity securities. The provisions of sections 41-2860—41-2862 shall not apply to equity securities of a domestic stock insurance company if: (a) Such securities shall be registered, or shall be required to be registered, pursuant to section 12 of the…

41-2867. Rules and regulations. The director of the department of insurance shall have the power to make such rules and regulations as may be necessary for the execution of the functions invested in him by sections 41-2860—41-2862, and may for such purpose classify domestic stock…

41-2868. Proxy regulations. (1) This section shall apply to all domestic stock insurers except: (a) A domestic stock insurer having less than one hundred (100) stockholders; except, that if ninety-five per cent (95%) or more of the insurer’s stock is owned or controlled by a pare…

41-2869. Purpose. The purpose of sections 41-2870 through 41-2871, 41-2839(4)(c), and 41-804(3), Idaho Code, is to authorize insurance companies to utilize modern systems for holding and transferring securities without physical delivery of securities certificates, subject to appr…

41-2870. Definitions. As used in this act: (1) "Securities" means instruments as defined in section 28-8-102(1)(o), Idaho Code. (2) "Clearing corporation" means a corporation as defined in section 28-8-102(1)(e), Idaho Code. (3) "Direct participant" means a national bank, state b…

41-2871. Use of book-entry systems. (1) A domestic insurer may deposit or arrange for the deposit of securities held in or purchased for its general account and its separate accounts in a clearing corporation or the federal reserve book-entry system. When securities are deposited…

41-2872. Health care provider contracts — Grievance procedure. (1) Any stock or mutual insurer (hereinafter insurance company) issuing benefits pursuant to the provisions of this chapter shall be ready and willing at all times to enter into health care provider service contracts …

41-2873. Best price — Most favored nations clause prohibited. (1) No stock or mutual insurance company (hereafter, insurance company) may require, as an element of any health care provider participation contract, that any provider agree: (a) To the unnegotiated adjustment by the …

41-2901. "Reciprocal" insurance defined. "Reciprocal" insurance is that resulting from an interexchange among persons, known as "subscribers", of reciprocal agreements of indemnity, the interexchange being effectuated through an "attorney in fact" common to all such persons.

41-2902. "Reciprocal insurer" defined. A "reciprocal insurer" means an unincorporated aggregation of subscribers operating individually and collectively through an attorney in fact to provide reciprocal insurance among themselves. When all participants in a reciprocal insurer are…

41-2903. Scope of chapter — Existing insurers. (1) All authorized reciprocal insurers shall be governed by those sections of this chapter not expressly made applicable to domestic reciprocals. Political subdivisions of the state of Idaho participating in a reciprocal insurance pr…

41-2904. Insuring powers of reciprocals. (1) A reciprocal insurer may, upon qualifying therefor as provided for by this code, transact any kind or kinds of insurance defined by this code, other than life or title insurances. (2) Such an insurer may purchase reinsurance, and may g…

41-2905. Name — Suits. A reciprocal insurer shall: (1) Have and use a business name. The name shall include the word "reciprocal," or "interinsurer," or "interinsurance," or "exchange," or "underwriters," or "underwriting." (2) Sue and be sued in its own name.

41-2906. Surplus funds required. (1) A domestic reciprocal insurer is governed, as to surplus required to be maintained, by section 41-313 or 41-313A, Idaho Code. (2) A domestic reciprocal insurer may be authorized to transact additional kinds of insurance if it has otherwise com…

41-2907. Attorney. (1) "Attorney," as used in this chapter, refers to the attorney in fact of a reciprocal insurer. The attorney may be an individual, firm, joint powers entity, or corporation. (2) The attorney of a foreign or alien reciprocal insurer, which insurer is duly autho…

41-2908. Organization of reciprocal insurer. (1) Twenty-five (25) or more persons domiciled in this state, or employers in this state having aggregate payrolls of not less than one and one-half million dollars ($1,500,000) and proposing to transact worker’s compensation insurance…

41-2909. Certificate of authority. (1) The certificate of authority of a reciprocal insurer shall be issued to its attorney in the name of the insurer. (2) The director may refuse, suspend or revoke the certificate of authority, in addition to other grounds therefor, for failure …

41-2910. Power of attorney or joint powers entity. (1) The rights and powers of the attorney or designated joint powers entity of a reciprocal insurer shall be as provided in the power of attorney given it by the subscribers. (2) The power of attorney must set forth: (a) The powe…

41-2911. Modifications. Modifications of the terms of the subscribers’ agreement or of the power of attorney of a domestic reciprocal insurer shall be made jointly by the attorney and the subscribers’ advisory committee. No such modification shall be effective retroactively, nor …

41-2912. Attorney’s bond. (1) Concurrently with the filing of the declaration provided for in section 41-2908, the attorney of a domestic reciprocal insurer shall file with the director a bond in favor of the state of Idaho for the benefit of all persons damaged as a result of br…

41-2913. Deposit in lieu of bond. In lieu of the bond required under section 41-2912, the attorney may maintain on deposit through the office of the director, a like amount in cash or in value of securities eligible for deposit under section 41-803 of this code and subject to the…

41-2914. Action on bond. Action on the attorney’s bond or to recover against any such deposit made in lieu thereof may be brought at any time by one or more subscribers suffering loss through a violation of its conditions, or by a receiver or liquidator of the insurer. Amounts re…

41-2915. Service of process — Judgment. (1) Legal process shall be served upon a domestic reciprocal insurer by serving the insurer’s attorney at his principal offices or by serving the director as the insurer’s process agent under sections 41-333 and 41-334. (2) Any judgment bas…

41-2916. Contributions to insurer. The attorney or other parties may advance to a domestic reciprocal insurer upon reasonable terms such funds as it may require from time to time in its operations. Sums so advanced shall not be treated as a liability of the insurer, and, except u…