STATEMENT OF PURPOSE
RS30962C1 / H0619
The purpose of this legislation is to address the challenges consumers are facing in obtaining affordable property
coverage due to potential wildfire risk.
Property insurers across the country are contracting or withdrawing from certain areas due to an increased
concern of wildfire exposure. Some states have seen a significant number of insurers leave the entire state. The
issue is driven by the number of forest fires, the high volume of property burnt in other states, the inflationary
cost to replace structures, and the skyrocketing cost of reinsurance to mitigate and spread the risk. As insurers
contract, it causes market instability. Other insurers are forced to reconsider their market participation. Insurers
who stay in less competitive markets face increased additional risks from the concentration of their exposure.
The proposal aims to improve and stabilize the market through two approaches. The bill creates an Idaho
Wildfire Risk Reinsurance and Mitigation Pool and board. It is modeled after Idaho’s successful High Risk
Reinsurance Pool for health carriers and other state mitigation pools. It creates two funds managed by the
board. One fund is to provide voluntary reinsurance for insurers who stay in the market in these challenged
communities. An insurer would decide whether to cede the risk and pay a premium for the coverage. The
second fund is to provide grants to assist consumers in hardening their homes against fire risks.
The Pool’s two funds are funded from five sources. 1. Premiums paid by property insurers who voluntarily
choose to buy the reinsurance coverage, 2. Future premium tax defined as ¼ one fourth of premium tax collected
above $135 million, 3. Moneys from the “Reduced Cigarette Ignition Propensity and Firefighter Protection Act
Fund" allocated to the State Fire Marshal in sections 39-8904 and 39-8909, Idaho Code, not utilized for the
processing, testing, enforcement and oversight activities under that chapter, 4. Federal grants or appropriations,
and 5. A mechanism for an assessment of property insurers to cover any unanticipated reinsurance losses. The
assessment potential incentivizes the insurers and the board to carefully manage the funds derived in the first
four sources. If managed correctly, there would be no need for an assessment.
FISCAL NOTE
There is no negative fiscal impact to the state or any local units of government. There is a positive impact to
the economy if rates are stabilized and coverage is accessible. There is an additional positive impact as homes
are hardened and saved.
Contact:
Representative Jordan Redman
(208) 332-1000
Dean Cameron
Department of Insurance
(208) 334-5500
DISCLAIMER: This statement of purpose and fiscal note are a mere attachment to this bill and prepared by a proponent
of the bill. It is neither intended as an expression of legislative intent nor intended for any use outside of the legislative
process, including judicial review (Joint Rule 18).
Statement of Purpose / Fiscal Note Bill SOP/FN INTRODUCED: 02/21/2024, 10:25 AM


Statutes affected:
Bill Text: 41-406