Amends, repeals, and adds to existing law to provide for the Director of the Department of Insurance to serve as the Director of the Department of Finance on and after July 1, 2027.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 854 BY WAYS AND MEANS COMMITTEE AN ACT1 RELATING TO THE DEPARTMENT OF FINANCE AND THE DEPARTMENT OF INSURANCE;2 PROVIDING LEGISLATIVE INTENT; REPEALING SECTION 67-2701, IDAHO CODE,3 RELATING TO THE DEPARTMENT OF FINANCE CREATION, DIRECTOR, ORGANI-4 ZATION, AND POWERS AND DUTIES; AMENDING CHAPTER 27, TITLE 67, IDAHO5 CODE, BY THE ADDITION OF A NEW SECTION 67-2701, IDAHO CODE, TO ESTAB-6 LISH PROVISIONS REGARDING THE DEPARTMENT OF FINANCE AND TO PROVIDE FOR7 THE DIRECTOR, ORGANIZATION, AND POWERS AND DUTIES; AMENDING SECTION8 41-202, IDAHO CODE, TO PROVIDE FOR THE DIRECTOR OF THE DEPARTMENT OF IN-9 SURANCE TO SERVE AS THE DIRECTOR OF THE DEPARTMENT OF FINANCE; AMENDING10 SECTION 41-206, IDAHO CODE, TO PROVIDE THAT THE DIRECTOR MAY UTILIZE11 OR ADMINISTRATIVELY COMBINE THE DIVISIONS OF FINANCE AND INSURANCE OR12 EMPLOYEES THEREOF IN ORDER TO ACHIEVE THE DUTIES OF EITHER DEPARTMENT;13 AMENDING SECTION 26-2412, IDAHO CODE, TO REMOVE OBSOLETE LANGUAGE; RE-14 PEALING SECTION 28-44-111, IDAHO CODE, RELATING TO COOPERATION BETWEEN15 DEPARTMENTS; AMENDING SECTION 59-904, IDAHO CODE, TO REMOVE OBSOLETE16 LANGUAGE; AND PROVIDING AN EFFECTIVE DATE.17

Be It Enacted by the Legislature of the State of Idaho:18

SECTION 1. LEGISLATIVE INTENT. It is the intent of the Legislature to19 provide for greater efficiencies between the Department of Finance and the20 Department of Insurance. To this end, the Legislature hereby establishes21 that, on and after July 1, 2027, the Director of the Department of Insurance22 shall concurrently serve as the director of the Department of Finance. The23 director shall find and implement cross-departmental efficiencies between24 the Department of Insurance and the Department of Finance in areas that in-25 clude but are not limited to administrative services, financial and account-26 ing support, and information technology.27

SECTION 2. That Section 67-2701, Idaho Code, be, and the same is hereby28 repealed.29

SECTION 3. That Chapter 27, Title 67, Idaho Code, be, and the same is30 hereby amended by the addition thereto of a NEW SECTION, to be known and des-31 ignated as Section 67-2701, Idaho Code, and to read as follows:32 67-2701. DEPARTMENT OF FINANCE -- CREATION -- DIRECTOR -- ORGANIZA-33 TION -- POWERS AND DUTIES. (1) There is hereby created the department of fi-34 nance. The department shall, for the purposes of section 20, article IV of35 the constitution of the state of Idaho, be an executive department of state36 government.37 (2) The director of the department of insurance as appointed pursuant38 to section 41-202, Idaho Code, shall be the director of the department of fi-39 nance. All responsibilities, powers, and duties of the director of finance40 shall be conferred to the director of the department of insurance.41

2 (3) Neither the director of the department nor any administrator of a1 division in the department shall be the owner of or financially interested2 either directly or indirectly in any banking or insurance corporation sub-3 ject to the supervision of the department.4 (4) The department of finance shall be composed of such divisions as5 are established by law and such other units as may be administratively estab-6 lished. The director shall appoint division administrators to serve, at the7 pleasure of the director, to head such divisions as may be established. The8 director shall, subject to the approval of the governor, fix the salary of9 each administrator.10 (5) The director shall have power:11 (a) To exercise the rights, powers and duties vested by law in the de-12 partment or in the director; and13 (b) To execute the laws relating to banks and banking.14 (6) The director may utilize or administratively combine the divisions15 or employees of the department of finance with the department of insurance in16 order to achieve the duties of either department.17

SECTION 4. That Section 41-202, Idaho Code, be, and the same is hereby18 amended to read as follows:19 41-202. DIRECTOR -- APPOINTMENT -- TERM -- QUALIFICATIONS. (1) The di-20 rector of the department of insurance shall be the chief executive officer of21 the department of insurance.22 (2) The director shall be appointed by the governor and shall hold of-23 fice for a term of four (4) years, subject to earlier removal by the governor.24 A vacancy in the office of director shall be filled for the balance of the un-25 expired term only.26 (3) The governor shall not appoint as director any individual, and no27 individual shall hold the office of director, who is not qualified therefor28 as follows:29 (a) Must be a qualified elector of the state of Idaho; and30 (b) Must have had at least five (5) years' practical experience in one31 or more of the types of insurance business subject to regulation by the32 director, or have had other professional or business experience reason-33 ably adequate in character and scope to equip him to discharge the du-34 ties and fulfill the responsibilities of the office of director.35 (4) On and after July 1, 2027, the director shall also be the director of36 the department of finance pursuant to section 67-2701, Idaho Code.37

SECTION 5. That Section 41-206, Idaho Code, be, and the same is hereby38 amended to read as follows:39 41-206. DIVISIONS AND EMPLOYEES. (1) The department shall be orga-40 nized into such divisions and such other units as may be administratively41 established in order to efficiently administer the department. Each di-42 vision shall be headed by a division administrator who shall be appointed43 by and serve at the pleasure of the director, and shall be a nonclassified44 employee exempt from the provisions of chapter 53, title 67, Idaho Code.45

3 (2) The director may pursuant to chapter 53, title 67, Idaho Code, ap-1 point, employ, fix the compensation of, prescribe and require the duties of2 and discharge such employees as the duties of his office may require.3 (3) The director may contract for and procure on a basis of fee and with-4 out giving such persons any status as an employee of this state, such inde-5 pendently contracting actuarial, technical, examining, and other similar6 professional services as the director may from time to time require for the7 discharge of his duties.8 (4) On and after July 1, 2027, the director may utilize or administra-9 tively combine the divisions or employees of the department of finance with10 the department of insurance in order to achieve the duties of either depart-11 ment.12

SECTION 6. That Section 26-2412, Idaho Code, be, and the same is hereby13 amended to read as follows:14 26-2412. ANNUAL FINANCIAL EXAMINATION. The corporation shall be ex-15 amined at least once annually by the director of the department of finance16 and shall make reports of its condition not less than annually to said direc-17 tor of the department of finance and more frequently upon call of the direc-18 tor of the department of finance, who in turn shall make copies of such re-19 ports available to the director of the department of insurance and the gov-20 ernor; and the corporation shall also furnish such other information as may21 from time to time be required by the director of the department of finance and22 secretary of state. The corporation shall pay the actual cost of said exam-23 inations. The director of the department of finance shall exercise the same24 power and authority over corporations organized under this act as is now ex-25 ercised over banks and trust companies by the provisions of title 26, Idaho26 Code, where the provision of title 26, Idaho Code, are not in conflict with27 this act.28

SECTION 7. That Section 28-44-111, Idaho Code, be, and the same is29 hereby repealed.30

SECTION 8. That Section 59-904, Idaho Code, be, and the same is hereby31 amended to read as follows:32 59-904. STATE OFFICES -- VACANCIES, HOW FILLED AND CONFIRMED. (a) All33 vacancies in any state office, and in the supreme and district courts, unless34 otherwise provided for by law, shall be filled by appointment by the gover-35 nor. Appointments to fill vacancies pursuant to this section shall be made36 as provided in subsections (b), (c), (d), (e), (f) and (g) of this section,37 subject to the limitations prescribed in those subsections.38 (b) Nominations and appointments to fill vacancies occurring in the of-39 fice of lieutenant governor, state controller, state treasurer, superinten-40 dent of public instruction, attorney general and secretary of state shall be41 made by the governor, subject to the advice and consent of the senate, for42 the balance of the term of office to which the predecessor of the person ap-43 pointed was elected.44 (c) Nominations and appointments to and vacancies in the following45 listed offices shall be made or filled by the governor subject to the advice46

4 and consent of the senate for the terms prescribed by law, or in case such1 terms are not prescribed by law, then to serve at the pleasure of the gover-2 nor:3 Director of the department of administration,4 Director of the department of finance,5 Director of the department of insurance,6 Director, department of agriculture,7 Director of the department of water resources,8 Director of the Idaho state police,9 Director of the department of commerce,10 Director of the department of labor,11 Director of the department of environmental quality,12 Director of the department of juvenile corrections,13 Executive director of the commission of pardons and parole,14 The state historic preservation officer,15 The administrator of the division of human resources,16 Member of the state tax commission,17 Members of the board of regents of the university of Idaho and the state18 board of education,19 Members of the Idaho water resource board,20 Members of the state fish and game commission,21 Members of the Idaho transportation board,22 Voting members of the state board of health and welfare,23 Members of the board of environmental quality,24 Members of the board of directors of state parks and recreation,25 Members of the board of correction,26 Members of the industrial commission,27 Members of the Idaho public utilities commission,28 Members of the Idaho personnel commission,29 Members of the board of directors of the Idaho state retirement system,30 Members of the board of directors of the state insurance fund,31 Members of the commission of pardons and parole.32 (d) Appointments made by the state board of land commissioners to the33 office of director, department of lands, and appointments to fill vacancies34 occurring in those offices shall be submitted by the president of the state35 board of land commissioners to the senate for the advice and consent of the36 senate in accordance with the procedure prescribed in this section.37 (e) Appointments made pursuant to this section while the senate is in38 session shall be submitted along with the letter of appointment to the sen-39 ate forthwith for the advice and consent of that body. Appointments made40 pursuant to this section while the senate is not in session shall be submit-41 ted along with the letter of appointment to the senate pursuant to section42 67-803, Idaho Code. Should the senate adjourn without granting its consent43 to an appointment the appointment shall thereupon become void and a vacancy44 in the office to which the appointment was made shall exist, and the office45 shall be deemed vacant upon the date of adjournment. It is the duty of the ap-46 pointing authority to supply the senate with the letter of appointment. The47 appointee shall supply the senate with the documentation it requests.48 All appointments made pursuant to subsection (c) of this section, ex-49 cept those appointments for which a term of office is fixed by law, shall ter-50

5 minate at the expiration of any gubernatorial term. Appointments to fill the1 vacancies thus created by the expiration of the term of office of the gover-2 nor shall be forthwith submitted to the senate for the advice and consent of3 that body, and when so submitted shall be as expeditiously considered as pos-4 sible.5 Upon receipt of an appointment along with the letter of appointment in6 the senate for the purpose of securing the advice and consent of the sen-7 ate, the appointment shall be referred by the presiding officer to the appro-8 priate committee of the senate for consideration and report prior to action9 thereon by the full senate.10 (f) Excepting the appointments made pursuant to subsection (c) of this11 section, whenever an appointee's term has expired as prescribed by law,12 the governor or the authorized appointing authority must fill the position13 within twelve (12) months of the expiration of the term. However, an of-14 fice will be vacant if the governor or the authorized appointing authority:15 (i) fails to timely appoint a qualified person at the earlier of the time16 required by law or required in this subsection; or (ii) fails to provide17 the senate with an appropriate letter or document of appointment by the18 thirty-sixth legislative day of the subsequent legislative session. All19 letters or documents of appointment must, as reasonably possible, accompany20 the additional documentation required by the senate. At the request of the21 secretary of the senate, the governor or the authorized appointing authority22 must provide the additional documentation.23 (g) It is the intent of the legislature that the provisions of this sec-24 tion as amended by this chapter shall not apply to appointments which have25 been made prior to the effective date of this chapter. It is the further in-26 tent of the legislature that the provisions of this section shall apply to27 the offices listed in this section and to any office created by law or exec-28 utive order which succeeds to the powers, duties, responsibilities and au-29 thorities of any of the offices listed in subsections (c) and (d) of this sec-30 tion.31

SECTION 9. This act shall be in full force and effect on and after July32 1, 2027.33